A large manufacturer uses two factors to decide whether to use truck or rail for movement of its
products to market: cost and total travel time. The manufacturer uses a utility formula that rates
each mode. The formula is U = 5C + 10T, where C is cost ($/ton) and T is time (hours). For a
given shipment of goods, a trucking firm can deliver in 16 hours and charges $25/ton, whereas a
railroad charges $17/ton and can deliver in 25 hours.
a. Which mode should the shipper select?
b. What other factors should the shipper take into account in making a decision?