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Question: Bill's glass store needs to ship an order of five chandeliers to a builder about 1,000 miles away. The chandeliers cost about $5,000 each, and Bill will be paid upon delivery. Bill plans to ship the order by truck at a cost of $250. The delivery will take five days. Bill uses a 20 percent annual inventory carrying charge with an operating schedule of 360 days per year. What will be the approximate total shipping and transit inventory cost of the shipment?

Operation Management, Management Studies

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