A Merchant Wholesaler Is Considering Four Physical Distribution Systems and Estimates

question 43

Multiple Choice

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

• 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.