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A fleet size of trucks is the lowest cost alternative, with expected monthly costs to Wingman of $ (Enter your responses as integers.)

A fleet size of trucks is the lowest cost alternative, with expected monthly costs to Wingman of $ (Enter your responses as integers.)

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Wingman Distributing Company is expanding its supply chain to include a new distribution hub in South Bend. A key decision involves the number of trucks for the facility. The particular model of truck Wingman is considering can be used 6,000 miles a month and will cost $1,100 a month in capital costs. In addition, each mile a truck is used costs $0.90 for maintenance. A local truck rental firm will rent trucks at a cost of $1.80 per mile, which includes the maintenance costs for those miles. Given the distribution of likely requirements for trucks, management has come up with three alternatives to consider as shown in the table. D 90,000 120,000 Monthly requirements (miles) Probability 30,000 0.20 5 0.40 15 0.40 20 Fleet size (trucks) Which fleet size will yield the lowest expected monthly costs for Wingman? A fleet size of trucks is the lowest cost alternative, with expected monthly costs to Wingman of $ (Enter your responses as integers.)
Transcribed Image Text:Wingman Distributing Company is expanding its supply chain to include a new distribution hub in South Bend. A key decision involves the number of trucks for the facility. The particular model of truck Wingman is considering can be used 6,000 miles a month and will cost $1,100 a month in capital costs. In addition, each mile a truck is used costs $0.90 for maintenance. A local truck rental firm will rent trucks at a cost of $1.80 per mile, which includes the maintenance costs for those miles. Given the distribution of likely requirements for trucks, management has come up with three alternatives to consider as shown in the table. D 90,000 120,000 Monthly requirements (miles) Probability 30,000 0.20 5 0.40 15 0.40 20 Fleet size (trucks) Which fleet size will yield the lowest expected monthly costs for Wingman? A fleet size of trucks is the lowest cost alternative, with expected monthly costs to Wingman of $ (Enter your responses as integers.)
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