Suppose you are shipping 1,000 pounds of product to a customer location that is 500 miles away from you.The customer calls you and increases the order size to 10,000 pounds.In this case:
A)The cost per pound of transportation for the order will decrease.
B)The total cost of transportation for the order will decrease.
C)The cost per distance traveled will decrease.
D)The fixed cost will be spread over more miles.

Question

Quizplus · Accepted Answer

Increasing the order size allows for the fixed costs of transportation to be spread over a larger quantity of goods, thus reducing the cost per pound of transportation.

Suppose You Are Shipping 1,000 Pounds of Product to a Customer