A merchant wholesaler is considering four physical distribution systems and estimates the total cost and customer service level for each as follows: The best alternative is:
$$\begin{array} { l r c }
& \text { TOTAL COST } & \text { CUSTOMER SERVICE LEVEL } \
\text { Airfreight } & \$ 1,000,000 & 90 \% \
\text { Inland waterways } & 250,000 & 50 \% \
\text { Truck } & 300,000 & 60 \% \
\text { Rail and warehouse } & 425,000 & 70 \%
\end{array}$$
A) truck.
B) airfreight.
C) rail and warehouse.
D) inland waterways.
E) Cannot be determined without knowing how the target customers feel about the customer service level.

Question

A merchant wholesaler is considering four physical distribution systems and estimates the total cost and customer service level for each as follows: The best alternative is:
$$\begin{array} { l r c } 
& \text { TOTAL COST } & \text { CUSTOMER SERVICE LEVEL } \
\text { Airfreight } & \$ 1,000,000 & 90 \% \
\text { Inland waterways } & 250,000 & 50 \% \
\text { Truck } & 300,000 & 60 \% \
\text { Rail and warehouse } & 425,000 & 70 \%
\end{array}$$
A) truck.
B) airfreight.
C) rail and warehouse.
D) inland waterways.
E) Cannot be determined without knowing how the target customers feel about the customer service level.

Quizplus · Accepted Answer

The best alternative depends on the merchant wholesaler's priorities regarding cost versus customer service level, which requires understanding the target customers' preferences.

A Merchant Wholesaler Is Considering Four Physical Distribution Systems and Estimates