One logistics company is considering two vessels to ship containers. Vessel A can hold 8,000 TEU with fixed costs of $400,000 and variables costs of $700 per TEU. Vessel B can hold 10,000 TEU with fixed costs of $600,000 and variables costs of $500 per TEU. The company charges $1,500 for each TEU it ships. If the company expects to ship 6,000 TEU, which vessel should it select? And what is the point of indifference for the two vessels?
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One logistics company is considering two vessels to ship containers. Vessel A can hold 8,000 TEU with fixed costs of $400,000 and variables costs of $700 per TEU. Vessel B can hold 10,000 TEU with fixed costs of $600,000 and variables costs of $500 per TEU. The company charges $1,500 for each TEU it ships. If the company expects to ship 6,000 TEU, which vessel should it select? And what is the point of indifference for the two vessels?
Vessel B; Point of indifference=500 TEU
Vessel B; Point of indifference=1,000 TEU
Vessel A; Point of indifference=500 TEU
Vessel B; Point of indifference=600 TEU
Vessel A; Point of indifference=1,000 TEU
Vessel A; Point of indifference=600 TEU
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