A manager must make a decision on shipping. There are two shippers: A and B. Both offer a two-day rate: A for $512, and B for $521. In addition, A offers a three-day rate of $478 and a nine-day rate of $401. and B offers a four-day rate of $460. and a seven-day rate of $414. Annual holding costs are 40% of unit price. 370 boxes are to be shipped, and each box has a price of $150. Which shipping alternative would you recommend?

A B

Option----Cost Option----Cost

2 days _____ 2 days _____

3 days _____ 4 days _____

9 days _____ 7 days _____

Which is correct?

1. ship two-day using B
2. ship seven-day using B
3. ship four-day using A
4. ship two-day using A