. A manager at Strateline Manufacturing must choose between two shipping alternatives: two-day
freight and five-day freight. Using five-day freight would cost $135 less than using two-day freight.
The primary consideration is holding cost, which is $10 per unit a year. Two thousand items are to
be shipped. Which alternative would you recommend? Explain.
. 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.
A manager must make a decision on shipping. There are two shippers: A and B. Both offer a
two-day rate: A for $500, and B for $525. In addition, A offers a three-day rate of $460 and a
nine-day rate of $400, and B offers a four-day rate of $450 and a seven-day rate of $410. Annual
holding costs are 35 percent of unit price. Three hundred boxes are to be shipped, and each box has
a price of $140. Which shipping alternative would you recommend? Explain.
