Your options for shipping
$95 comma 38095,380
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 5403,540,
or (2) truck the parts to Los Angeles and then ship at a total cost of
$4 comma 9204,920.
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 5004,500
and also takes
1818
days, what is your most economical plan?
Part 2
The daily holding cost of Alternative 1 is
$78.4578.45.
(Enter your response rounded to two decimal places.)