Problem:
A manager must make a decision on shipping. The shipper the manager's company is contracted to use offers 2 day and 7 day delivery. The cost is 500 dollars for 2 day delivery and 300 dollars for 7 day delivery. The annual earning potential of the shipped item is 730 dollars.
Required:
Question 1) What is the incremental holding cost?
Solve the given problem and show all work.