MyLab Operations Management with Pearson eText -- Access Card -- for Operations Management: Processes and Supply Chains
11th Edition
ISBN: 9780133885583
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Chapter 14, Problem 9P
Summary Introduction
Interpretation: The fleet size that contributes to yielding the lowest expected monthly costs for the company should be calculated.
Concept Introduction: Every mile a truck runs costs about $0.90 for maintenance. And, the rental cost of each truck per mile is $1.40.
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Wingman Distributing Company is expanding its supply chain
facility. The particular model of truck Wingman is considering can be used 4,000 miles a month and will cost $800 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 $1.70 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.
include a new distribution hub in South Bend. A key decision involves the number of trucks for the
Monthly requirements (miles)
20,000
60,000
80,000
Probability
Fleet size (trucks)
0.20
0.50
0.30
15
20
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 S
(Enter your responses as integers.)
Chapter 14 Solutions
MyLab Operations Management with Pearson eText -- Access Card -- for Operations Management: Processes and Supply Chains
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