Which option is more economical

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Your options for shipping $97,570 of machine parts from Baltimore to Kuala Lumpur, Malaysia, are (1) use a ship that will take 32 days at a cost of $3,540 or (2) truck the parts to Los Angeles and then ship at a total cost of $4,780. The second option will take only 20 days. You are paid via a letter of credit the day the parts arrive. Your holding cost is estimated at 30% of the value per year.

a) Which option is more economical? What is the daily holding cost?

b) What customer issues are not included in the data presented?

Reference no: EM132247080

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