A Vancouver based manager must make a decision on delivery alternatives for transporting a product from its supplier in Toronto, Ontario to the retail outlet located in Edmonton, Alberta. There are two carriers: Pallet Movers and Reed Transport, available that can physically move the material in question.

$500$ boxes are to be delivered and the freight cost for the whole lot for each option is given below. Annual holding cost is $17\%$ of total cost, and each box has a cost of $$230.$ Assume $365$ days per year.

Pallet Movers Reed Transport

Option A Freight Cost $($$$)$ Options B Freight Cost $($$$)$

$5$ days $$630\mathrm{.}009$ days $$475\mathrm{.}00$

Question $1(1$ point$)$

Determine annual holding cost

Question $1$ options:

$$19,500$

$$14,400$

$$11,475$

$$19,550$