The Canadian government has built a large grain-shipping port at Churchill, Manitoba, on the Hudson Bay. Grain grown in southern Manitoba is carried by rail to Churchill during the open-water shipping season. Unfortunately the port is open only 50 days per year during July and August. This leads to some critical crew staffing decisions by management. The port has the capacity to load up to 7 ships simultaneously, provided that each loading bay has an assigned crew. The remote location and short shipping season results in a very high labor cost for each crew assigned, and management would like to minimize the number of crews. Ships arrive in a random pattern that can be modeled using the Poisson probability model. If a ship arrives and all available loading bays are filled, the ship will be delayed, resulting in a large cost that must be paid to the owner of the ship. This penalty was negotiated to encourage ship owners to send their ships to Churchill.Results of an initial analysis indicate that each ship requires six hours for loading by a single crew. The port can remain open only 50 days per year, and 500 ships must be loaded during this time. Each additional crew costs $180,000, and each boat delay costs $10,000. How many crews should be scheduled?

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...
icon
Related questions
icon
Concept explainers
Topic Video
Question

The Canadian government has built a large grain-shipping port at Churchill, Manitoba, on the Hudson Bay. Grain grown in southern Manitoba is carried by rail to Churchill during the open-water shipping season. Unfortunately the port is open only 50 days per year during July and August. This leads to some critical crew staffing decisions by management. The port has the capacity to load up to 7 ships simultaneously, provided that each loading bay has an assigned crew. The remote location and short shipping season results in a very high labor cost for each crew assigned, and management would like to minimize the number of crews. Ships arrive in a random pattern that can be modeled using the Poisson probability model. If a ship arrives and all available loading bays are filled, the ship will be delayed, resulting in a large cost that must be paid to the owner of the ship. This penalty was negotiated to encourage ship owners to send their ships to Churchill.
Results of an initial analysis indicate that each ship requires six hours for loading by a single crew. The port can remain open only 50 days per year, and 500 ships must be loaded during this time. Each additional crew costs $180,000, and each boat delay costs $10,000. How many crews should be scheduled?

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Inventory management
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Practical Management Science
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Business in Action
Business in Action
Operations Management
ISBN:
9780135198100
Author:
BOVEE
Publisher:
PEARSON CO
Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.