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Fresh Farm Produce Co

Question 109

Multiple Choice

Fresh Farm Produce Co.has examined transportation costs and found that shipping its fruits and vegetables by rail to distant markets would cost them only $89,000,while airfreight would cost $250,000.The costs of the actual fruits and vegetables are the same for each transportation mode; in the context of implementing total cost approach,what should Fresh Farm Produce do?


A) It should try to determine other physical distribution costs before deciding on whether to use airfreight.
B) It should immediately switch to rail to save money.
C) It should conduct marketing research to determine which fruits and vegetables customers want most.
D) It should immediately switch to airfreight because it is clearly a faster mode of transportation.
E) It should ship with airfreight and store the fruits and vegetables in warehouses.

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