Solved Example Attached
Ellisson Seafood Company ships fresh seafood to customers in the local area. The logistics manager has developed 3 alternatives to ship the seafood.
#1 Each time a shipment is ready, call a common carrier. While there is no fixed costs the variable cost per shipment is $750.
#2 Enter into a contract with a common carrier. While the variable cost would be $300 per shipment, the fixed cost would be $5,000 per year.
#3 Lease their own refrigerated trucks. The fixed cost would be $21,000 per year and the variable costs would be $50 per shipment.
Now Ellisson does not know what the number of shipment will be per year. But a review of past years history provided the following information:
Ellisson Seafood does not know how many shipments there will be per year. However an analysis of the previous years’ data revealed the following:
Shipments per year
Question: Given the costs and probability, which option should Ellisson select?
A payout table and a decision tree are required for this assignment.
Hint: Decision tree has 3 main branches each with 3 branches of their own. The payout table will have 9 columns; Carrier options, # of shipments, cost per shipment, fixed annual cost, per shipment cost total per year, combined total costs, % probability, decision cost and final weighted costs.
We value our customers and so we ensure that what we do is 100% original..
With us you are guaranteed of quality work done by our qualified experts.Your information and everything that you do with us is kept completely confidential.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
The Product ordered is guaranteed to be original. Orders are checked by the most advanced anti-plagiarism software in the market to assure that the Product is 100% original. The Company has a zero tolerance policy for plagiarism.Read more
The Free Revision policy is a courtesy service that the Company provides to help ensure Customer’s total satisfaction with the completed Order. To receive free revision the Company requires that the Customer provide the request within fourteen (14) days from the first completion date and within a period of thirty (30) days for dissertations.Read more
The Company is committed to protect the privacy of the Customer and it will never resell or share any of Customer’s personal information, including credit card data, with any third party. All the online transactions are processed through the secure and reliable online payment systems.Read more
By placing an order with us, you agree to the service we provide. We will endear to do all that it takes to deliver a comprehensive paper as per your requirements. We also count on your cooperation to ensure that we deliver on this mandate.Read more