Determine the incremental holding cost, Operation Management

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Determine the incremental holding cost

Problem:

A manager must make a decision on shipping. The shipper the manager's company is contracted to use offers 2 day and 7 day delivery. The cost is 500 dollars for 2 day delivery and 300 dollars for 7 day delivery. The annual earning potential of the shipped item is 730 dollars.

Required:

Question 1) What is the incremental holding cost?

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Operation Management: Determine the incremental holding cost

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