Jones Company is comparing two alternative shipping carriers to move its containers. The value of the containers is $40,000. Carrier 1 takes 4 days to ship the containers and gives a quote of $300 for the shipment. Carrier 2 takes 5 days to ship the containers and gives a quote of $260 for the shipment.

(1) Which carrier should Jones Company use, if it seeks to choose the carrier with the lowest cost? Why? The inventory holding cost for these containers is estimated to be 15% of the value per year. Assume there are no other cost differences across remaining logistics functions. 

(2) Apart from the cost, discuss two factors that Jones Company should consider when choosing the carrier, and explain how these factors will influence the decision.

Answer rating: 100% (QA)

1 To determine the lowest cost we need to consider both the shipp... View the full answer