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An appliance manufacturer located in Pittsburgh purchases 3,000 cases of plastic parts valued at $100 per case from two suppliers. Purchases are currently divided equally between the suppliers. Each supplier uses rail transport and achieves the same average delivery time. However, for each day that a supplier can reduce the average delivery time, the appliance manufacturer will shift 5% if its total purchases (or 150 cases) to the supplier offering the premium delivery service. A supplier earns a margin of 20% on each case before transportation charges.

Should Supplier A switch from rail to air or truck modes

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