Question: Problem 11.8 (page 443 in the text)

a. Your options for shipping $100,000 of machine parts from Baltimore to Kuala Lumpur, Malaysia, and (1) use a ship that will take 30 days at a cost of $3,800) or (2) truck that parts to los Angeles and then ship at a total cost of $4,800. 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.

i. Which option is more economical?

ii. What customer issues are not included in the data presented?