Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

3. A warehouse handles parcel deliveries for online retailers. The number of parcels received each day by the warehouse is a random variable with

A warehouse handles parcel deliveries for online retailers. The number of parcels received each day by the warehouse is a ran 

3. A warehouse handles parcel deliveries for online retailers. The number of parcels received each day by the warehouse is a random variable with the following discrete probability distribution (Table 3). For example, there is a 2.5% probability for the number of parcels in a day to be 1500. Parcels Probability Table 3 1500 2000 2500 3000 3500 4000 4500 5000 5500 6000 2.5% 5% 10% 20% 22.5% 15% 10% 7.5% 5% 2.5% The warehouse employs a team of workers to deliver the parcels. Each worker can deliver 500 parcels per day, and costs the warehouse $300 to hire a worker for a day. In case the number of parcels exceeds the capacity of the workers, the warehouse would outsource delivery of the surplus parcels to a 3rd party logistics company, which charges $5 per parcel for the delivery service. Based on the information provided above, answer the questions below: (a) What is the underage cost for the warehouse to NOT have enough workers? (b) What is the overage cost for the warehouse to have too many workers? (c) How many workers should the warehouse hire? (5 marks) (5 marks) (10 marks)

Step by Step Solution

3.47 Rating (170 Votes )

There are 3 Steps involved in it

Step: 1

ANSWER The cost of outsourcing per parcel is 5 and the number of surplus parcels is the difference between the total number of parcels and the number of parcels that can be delivered by the workers Ma... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Information System

Authors: James A. Hall

7th Edition

978-1439078570, 1439078572

More Books

Students also viewed these General Management questions

Question

Let x, y, z R a) If ||x - z|| Answered: 1 week ago

Answered: 1 week ago

Question

What are the objectives of application controls?

Answered: 1 week ago

Question

Define the term attest function.

Answered: 1 week ago