A manager must make a decision on shipping. There are two shippers, A and B. Both offer a two-day rate: A for $530 and B for $521. In addition, A offers a three-day rate of $466 and a nine-day rate of $417, and B offers a four-day rate of $459 and a seven-day rate of $432. Annual holding costs are 37 percent of unit price. Three hundred and twenty boxes are to be shipped, and each box has a price of $154. Which

A manager must make a decision on shipping. There are two shippers, A and B. Both offer a two-day rate: A for $530 and B for $521. In addition, A offers a three-day rate of $466 and a nine-day rate of $417, and B offers a four-day rate of $459 and a seven-day rate of $432. Annual holding costs are 37 percent of unit price. Three hundred and twenty boxes are to be shipped, and each box has a price of $154. Which shipping alternative would you recommend? (Round your intermediate calculations to 3 decimal places and final answers to 2 decimal places. Omit the "$" 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

rev: 03_05_2012

rev: 03_20_2012

Explanation:

H = .37 (320 boxes) ($154 per box) (1/365 days) = $49.955

Cost = FC + dH

A			B
Option	Cost		Option	Cost
2 days	$629.91		2 days	$620.91
3 days	$615.87		4 days	$658.82
9 days	$866.60		7 days	$781.69

Ship three-day using A.