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

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Top answer
Luca
Coach
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 CD 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

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