Fresh Farm Produce Co. has examined transportation costs and found that shipping its fruits and vegetables by rail to distant markets would cost them only $89,000, while airfreight would cost $250,000. The costs of the actual fruits and vegetables are the same for each transportation mode. In the context of implementing the total cost approach, what should Fresh Farm Produce do?
A. It should conduct marketing research to determine which fruits and vegetables customers want most.
B. It should immediately switch to airfreight because it is clearly a faster mode of transportation.
C. It should try to determine other physical distribution costs before deciding on whether to use airfreight.
D. It should ship with airfreight and store the fruits and vegetables in warehouses.
E. It should immediately switch to rail to save money.
Answer: C
You might also like to view...
Physical controls to safeguard assets are not intended to include simple controls such as fences and locks
a. True b. False Indicate whether the statement is true or false
The Bookstore Café is a small restaurant located in a downtown business district. It is opened for breakfast and lunch and serves simple yet nutritious meals and also sells books from the New York Times bestseller list. How would you categorize the book inventory, cooking equipment, tables, chairs, and the register?
A. As investor capital B. As current liabilities C. As assets D. As retained earnings E. As owners' equity
Which of the following refers to situations where a limited amount of goods are divided, and the goal is to get the largest slice?
A. fixed pie B. expanding pie C. BATNA D. integrative bargaining
True Tomato Inc. makes organic ketchup. To promote its products, this firm decided to make bottles in the shape of tomatoes. To accomplish this, True Tomato worked with its bottle manufacture to create a set of unique molds for its bottles. Which of the following specialized assets does this example demonstrate?
A. physical-asset specificity B. research specificity C. human-asset specificity D. site specificity