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Operations management - Business

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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.

  • Operations management - Business -

    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.

  • Operations management - Business -

    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??

  • Operations management - Business -


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