Problem:
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 $525. In addition, A offers a three-day rate of $470 and a nine-day rate of $401, and B offers a four-day rate of $458 and a seven-day rate of $416. Annual holding costs are 40 percent of unit price. Four hundred and ten boxes are to be shipped, and each box has a price of $156.
Required:
Question 1) Which shipping alternative would you recommend? Solve the problem and show all work.