Determine which shipping alternative would be most economical to ship 80 boxes of parts when each box has a price of $200 and holding costs are 30 percent of price, given this shipping information: overnight, $300, two-day, $260, six-day, $180.

Question

Determine which shipping alternative would be most economical to ship 80 boxes of parts when each box has a price of $200 and holding costs are 30 percent of price, given this shipping information: overnight, $300, two-day, $260, six-day, $180.

Answer 1

I am wondering of your holding costs are per day or not dependent on time. It makes a big difference.

Assuming holding costs are independent of time during shipping. on a per box price..
overnight: 300
two day: 260+60
six day: 180+60
which indicates six day shipping

Assuming holding costs are per day costs
overnite: 300
two day:260+120
six day:180+360
which indicates overnite.

I hope I answered your question.

Answer 2

Thank you very much

i think its more likely to be dependent on time, but aren't we supposed to consider $60 x 80 boxes??

Answer 3

To determine the most economical shipping alternative, we need to calculate the total cost for each shipping option and choose the one with the lowest cost.

1. Calculate the holding cost per box:
Holding Cost = 30% of Price
Holding Cost = 0.30 * $200 = $60 per box

2. Calculate the total cost for each shipping alternative:

a) Overnight Shipping:
Shipping Cost = $300 per shipment
Total Cost = Shipping Cost + (Holding Cost * Number of Boxes)
Total Cost = $300 + ($60 * 80) = $300 + $4,800 = $5,100

b) Two-Day Shipping:
Shipping Cost = $260 per shipment
Total Cost = Shipping Cost + (Holding Cost * Number of Boxes)
Total Cost = $260 + ($60 * 80) = $260 + $4,800 = $5,060

c) Six-Day Shipping:
Shipping Cost = $180 per shipment
Total Cost = Shipping Cost + (Holding Cost * Number of Boxes)
Total Cost = $180 + ($60 * 80) = $180 + $4,800 = $4,980

3. Compare the total costs and determine the most economical shipping alternative:
- Overnight Shipping: $5,100
- Two-Day Shipping: $5,060
- Six-Day Shipping: $4,980

Based on the calculations, the most economical shipping alternative would be the Six-Day Shipping option, with a total cost of $4,980.

Answer 4

To determine the most economical shipping alternative for shipping 80 boxes of parts, we need to consider both the shipping and holding costs associated with each alternative.

Step 1: Calculate the holding costs for each box:
The holding cost is given as 30% of the price of each box, which means holding cost per box is 0.30 * $200 = $60.

Step 2: Calculate the total holding costs for all 80 boxes:
Total holding costs = Holding cost per box * Number of boxes
Total holding costs = $60 * 80 = $4800

Step 3: Determine the total cost for each shipping alternative:
a. Overnight:
Shipping cost = $300
Total cost = Shipping cost + Total holding costs = $300 + $4800 = $5100

b. Two-day:
Shipping cost = $260
Total cost = Shipping cost + Total holding costs = $260 + $4800 = $5060

c. Six-day:
Shipping cost = $180
Total cost = Shipping cost + Total holding costs = $180 + $4800 = $4980

Step 4: Compare the total costs:
Among the three shipping alternatives, the most economical option is the one with the lowest total cost. In this case, the six-day shipping alternative has the lowest total cost of $4980. Therefore, the six-day shipping alternative would be the most economical option to ship 80 boxes of parts.

It is important to note that this analysis only takes into account the shipping and holding costs. Other factors such as delivery time, reliability, and any specific requirements should also be considered when making a shipping decision.