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Lockbox Case Study: Minimizing Operating Cost

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A company is considering opening lockboxes in several cities to reduce the 'float' (lost interest) waiting for mailed payments. In what cities should lockboxes be opened to minimize lost interest and operating cost? Each area can send payments to only one city.The interest rate is 6%

A company wants to reduce lost interest ('float') due to mail delay, for the payments it receives every day. It is considering opening lockboxes in 6 different cities. Each lockbox would require a certain amount of money each year to operate. The company receives payments from the Northwest, the North, the Northeast, the Southwest, the South and the Southeast. The amounts involved per day are known. Where should the company open lockboxes?

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The expert examines minimizing operating costs for Lockbox Case Study.

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