Suppose that a product's value is $1000.The manufacturer experiences a holding cost of 2.5% per month.The firm ships the product across country by truck,and it arrives six days later.The shipping cost is $80 per unit.What is the holding cost on each unit shipped? (Assume 30 days per month. )

Question

Quizplus · Accepted Answer

The holding cost per day is 2.5% of $1000 divided by 30 days, which is approximately $0.83 per day. For 6 days, the holding cost is 6 * $0.83 = $5.00.

Suppose That a Product's Value Is $1000