Am i missing something, monthly saving for seasonal month is 1000, how did they get 3000 for leasing option.

Disguise distribution
New answer on Jan 16, 2020
1 Answer
1.2 k Views
Jasmeet asked on Jan 15, 2020

Overview of answers

Upvotes
  • Upvotes
  • Date ascending
  • Date descending
Best answer
Luca
Expert
Content Creator
replied on Jan 16, 2020
BCG |NASA | SDA Bocconi & Cattolica partner | GMAT expert 780/800 score | 200+ students coached

Hello Jasmeet,

I imagine you are referring to this stament:

We can see that it would be cheaper for the client to lease their own truck for seasonal months to transport goods to centers C, D and E. The savings per month would total € 3,000, that is, € 12,000 annually (as there are 4 seasonal months).

Let's look at the following table:

Comparison of the distribution costs

We can calulate the monthly saving for each center:

  • Center C:
    • ​Previous costs: 6000€
    • New costs: 5800€
    • Saving: 200€
  • Center D:
    • ​Previous costs: 7200€
    • New costs: 6200€
    • Saving: 1000€
  • Center E:
    • ​Previous costs: 8400€
    • New costs: 6600€
    • Saving: 1800€

If you sum up all the savings you have 3000€ / month.

Does it make sense?Contact me if you need further explanations.

Best,
Luca

Was this answer helpful?
Luca gave the best answer

Luca

Content Creator
BCG |NASA | SDA Bocconi & Cattolica partner | GMAT expert 780/800 score | 200+ students coached
64
Meetings
3,095
Q&A Upvotes
33
Awards
5.0
19 Reviews
How likely are you to recommend us to a friend or fellow student?
0
1
2
3
4
5
6
7
8
9
10
0 = Not likely
10 = Very likely