Your options for shipping $99,030 of machine parts from Hamilton to Kuala Lumpur, Malaysia, are (1) use a ship that will take 29 days at a cost of

$3,730,or (2) truck the parts to Vancouver and then ship at a total cost of $4,800.

The second option will take only 22 days. You are paid via a letter of credit the day the parts arrive. Your holding cost is estimated at 30% of the value per year.

a)

Alternative 1

Alternative 2

is more economical, with a daily holding cost of $___. (Enter your response rounded to two decimal places.)

b) What issues are not included in the data presented?

A. For each additional day it takes to deliver the parts, customer satisfaction is likely to decrease.

B. For each additional day it takes to deliver the parts, total fuel costs for shipping increase.

C. For each additional day it takes to deliver the parts, you forgo the interest you could have earned on the payment.