The decision will be affected by the demand level

Assignment Help Operation Management

Reference no: EM132082220

Engleside Seafood Company ships fresh seafood to customers in a nearby city. The logistics manager has identified three shipping alternatives. The first is to call a common carrier, the second is to lease its own fleet of refrigerated trucks and the third option is a contractual arrangement with a local carrier. The outcome of the decision will be affected by the demand level as indicated in the payoff table below.

Demand

Alternatives Low High

Common Carrier 200 4000

Lease Own Fleet 2000 2600

Contract with Local Carrier 700 3000

Engleside has no estimates of the probabilities for demand at this time but wants to do a sensitivity analysis to explore how changes in probability would affect the decision.

a. Plot the EMV lines for the three alternatives on a graph (one graph), with the probability of High demand on the horizontal axis.

b. Interpret your graph.

Reference no: EM132082220

Questions Cloud

Explain two psychological first aid interviewing strategies : For each of these two individuals, explain two psychological first aid interviewing strategies that you would apply for their situation.

A merchant has coffee worth : A merchant has coffee worth $30 a pound that she wishes to mix with 80 pounds of coffee worth $90 a pound to get a mixture that she will sell for $70 a pound.

What are the markup percentages for total variable costs : If management desires a 12 percent rate of return on total assets, what are the markup percentages for total variable costs

What other factors should considered before a final decision : What other factors should be considered before a final decision is made? Based only on the data presented, should the proposal be accepted

The decision will be affected by the demand level : The outcome of the decision will be affected by the demand level as indicated in the payoff table below.

Properly capture corporations reason for existence : Does a focus on shareholfder value properly capture a corporations reason for existence?

What is the expected failure cost per part : What is the expected failure cost per part? What is the maximum amount that the firm should be willing to pay per part to install the backup?

Explain why job analysis is critical to staffing function : Define staffing and explain why job analysis (JA) is critical to the staffing function. Draw/reproduce the “Role of JA in HR Selection Model.”

Distinguish between individuals in crisis-crisis survivors : A child has cut herself badly with a piece of glass. Another man is brought in on a stretcher complaining of chest pains and numbness in his left arm.

User Account

All Pages