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Jasmeet
on Jan 15, 2020
Global
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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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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 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

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