A load of parts valued at $77,000 needs to be shipped from Toronto to Vancouver. They could be shipped by truck, taking 21 days at a cost of $1,500, or by rail, taking 10 days at a cost of $2,500. The annual holding cost rate for this type of item has been estimated at 14%. the recommendation is Truck!
c. How would your recommendation differ if holding costs were 43% instead of 14%? Explain.