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Grier Food in Erie, Pennsylvania, manufactures and markets snack foods. Rita Riley manages the company's fleet of 220 delivery trucks. Riley has been charged with

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Grier Food in Erie, Pennsylvania, manufactures and markets snack foods. Rita Riley manages the company's fleet of 220 delivery trucks. Riley has been charged with "reengineering" the fleet-management function. She has an important decision to make (Click the icon to view the decision Riley has to make.) Assume that Riley's records show the following data concerning Grier Food's fleet: (Click the icon to view the data.) Suppose that Fleet Management Services offers to manage Grier Food's fleet for an annual fee of $276,000. Which alternative will maximize Grier Food's short-term operating income? Complete the following analysis. (Enter a "o" for any zero amounts. Use a minus sign or parentheses for subtracting numbers that are typically shown enclosed in parentheses in an outsourcing decision.) Grier Food Outsourcing Decision Analysis Retain Outsource In-House to FMS Difference Total cost of fleet Operating income for Grier Food will if it outsources the fleet-management function by S .Should she continue to manage the fleet in-house with the five employees reporting to her? To do so, she will have to acquire new fleet-management software to streamline Grier Food's fleet-management process .Should she outsource the fleet-management function to Fleet Management Services, a company that specializes in managing fleets of trucks for other companies? Fleet Management Services would take over the maintenance, repair, and scheduling of Grier Food's fleet (but Grier Food would retain ownership) his alternative would require Riley to lay off her five employees. However, her own job would be secure, as she would be Grier Food's liaison with Fleet Management Services Book.value.of.Grier Food's trucks, with an estimated four-year. life. . .. $3,100,000 Annual leasing fee for new fleet-management software .. . _ . . . . . .$ 8,000 Fleet Supervisor Riley's annual salary . . . . . . .. . . . . . . . . . . . .. . Total annual salaries of Grier Food's five other fleet-management employees 62,000 $150,000

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