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A Merchant Wholesaler Is Considering Four Physical Distribution Systems and Estimates

Question 84

Multiple Choice

A merchant wholesaler is considering four physical distribution systems and estimates the total cost and customer service level for each as follows:  TOTAL COST  CUSTOMER SERVICE LEVEL  Airfreight $1,000,00090% Inland waterways 250,00050% Truck 300,00060% Rail and warehouse 425,00070%\begin{array}{l}\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { TOTAL COST } \quad \text { CUSTOMER SERVICE LEVEL }\\\begin{array} { l r r } \text { Airfreight } &\quad\quad \$ 1,000,000 &\quad\quad 90 \% \\\text { Inland waterways } & 250,000 & 50 \% \\\text { Truck } & 300,000 & 60 \% \\\text { Rail and warehouse } & 425,000 & 70 \%\end{array}\end{array} The best alternative is:


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.

Correct Answer:

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