Operations Management Finance and operations problems

A manager at Strateline Manufacturing must choose between two shipping alternatives: two-day freight and five-day freight. Using five-day freight would cost $195 less than using two-day freight. The primary consideration is holding cost, which is $11 per unit a year. 2,375 items are to be shipped.

Which alternative would you recommend? (Do not round your intermediate calculations.)

Two-day freight Five-day freight

Hint #1

Determine which shipping alternative would be most economical to ship 63 boxes of parts when each box has a price of $286 and holding costs are 26 percent of price, given this shipping information: overnight, $405, two-day, $265, six-day, $215. (Round your intermediate calculations to 2 decimal places.)

Overnight Two-day Six-day

Hints

A manager must make a decision on shipping. There are two shippers, A and B. Both offer a two-day rate: A for $526 and B for $532. In addition, A offers a three-day rate of $470 and a nine-day rate of $411, and B offers a four-day rate of $459 and a seven-day rate of $412. Annual holding costs are 34 percent of unit price. Three hundred and fourty boxes are to be shipped, and each box has a price of $148. Which shipping alternative would you recommend? (Round your intermediate calculations to 3 decimal places and final answers to 2 decimal places. Omit the "$" sign in your response.)

A B Option Cost Option Cost 2 days $ 2 days $

3 days $ 4 days $

9 days $ 7 days $

Ship three-day using A Ship two-day using B Ship four-day using B Ship seven-day using B Ship two-day using A

Hint #1

Hints