The Transportation Method Is a Linear Programming Technique

question 13

Multiple Choice

The transportation method is a linear programming technique. Linearity is present in the following way:

• A) The cost of goods shipped from any source to any destination is a linear function of quantity shipped.
• B) The cost of goods shipped from any source to any destination is a linear function of the cost per unit.
• C) The total cost associated with a given plan is a linear function of shipping costs.
• D) Cell evaluations require linear horizontal movements through the matrix.
• E) Cell evaluations are linear.

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Definitions:

Net Present Value

A financial metric that calculates the value of a series of cash flows by discounting them to their present value using a specific rate.

Discount Rates

The interest rate that the Federal Reserve or a central bank charges depository institutions on loans they receive, or more broadly, the interest rate used to discount future cash flows to their present value.

Initial Purchase Price

The amount paid to buy a good or service for the first time, not including additional costs like maintenance or insurance.

Present Value

is a financial concept that calculates the current worth of an amount of money that is to be received in the future, taking into account a specific rate of interest.