The manager at a large manufacturer is planning warehousing needs for the coming year. She predicts...
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The manager at a large manufacturer is planning warehousing needs for the coming year. She predicts that warehousing needs will be normally distributed, with a mean of 500,000 square feet and a standard deviation of 150,000. The manager can obtain a full-year lease at $0.5 per square foot per month or purchase storage space on the spot market if more space is needed. Spot market rates have averaged $0.7 per square foot per month. How large an annual contract should the manager sign for the full-year lease? The manager at a large manufacturer is planning warehousing needs for the coming year. She predicts that warehousing needs will be normally distributed, with a mean of 500,000 square feet and a standard deviation of 150,000. The manager can obtain a full-year lease at $0.5 per square foot per month or purchase storage space on the spot market if more space is needed. Spot market rates have averaged $0.7 per square foot per month. How large an annual contract should the manager sign for the full-year lease?
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Related Book For
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins
Posted Date:
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