Question content area

Part $1$

Your options for shipping

$$$$98$ comma $73098,730$

of machine parts from Baltimore to Kuala$$ Lumpur, Malaysia, are$(1)$ use a ship that will take

$3232$

days at a cost of

$$$$3$ comma $4403,440,$

or$(2)$ truck the parts to Los Angeles and then ship at a total cost of

$$$$5$ comma $0605,060.$

The second option will take only

$1818$

days. You are paid via a letter of credit the day the parts arrive. Your holding cost is estimated at

$3030\%$

of the value per year.

If you have a third option and it costs only

$$$$4$ comma $3904,390$

and also takes

$1818$

$$days$,$ what is your most economical$$ plan?

Part $2$

The daily holding cost of Alternative $1$ is

$$$$9726\mathrm{.}259726\mathrm{.}25.$

$($Enter your response rounded to two decimal$$ places.$)$