Help Save & Eat Submit 1 1 5 Question: Decision Making. The Case of Tri-State Shipping (TSS) Please read the case carefully and be sure that you answer all questions asked in the required section to receive full credit. You can solve the questions in a word or excel file. Then NOT FORGET TO upload or submit your file/word, excel pol) to the Ink below Tri-State Shipping (155) operates avantportation company that offers two services between Chicago and the Twin Cutes tong-haul troint and intra city package delivery The company currently operates 20 tong haul actor trailers and 30 local delvery vans. The company employs 15 long haul drivers and 30 delivery van drivers Recent due to Covo TS has been contracted by several grocery store chans to provide local grocery delivery. This is being handled by the Intercity package delivery segment. It is unknown whether the demand for this service will continue pestandeme TSS must maintain station in each cly to receive and load freight for both services. The company employs 20 warehouse borers. An operating costs for the two stations we $2.000.000, excluding brand depreciation. All station is wealocated equally between the long haul and delivery services TSS's revenues per mile. The TSS segmented income statement for fast year is below. function of miles driven and veriges $5 per me for the song. Hul height services. Revenue for the intra-city package delivery service averages about $8 Long Haul Package Reve Freight Delivery Total long-haulage 35 350.000 $5.000000 per me Delivery average 38 34000000 4000.000 Dermed Total Revenue $5.000.000 $4,000,000,000,000 Expenses Ditabor 31000000 00000 bodo Varehoune or 250,000 266000 OOOOO socied Veeting Cou FOTO S00000 VODO Station Operating costs 100000 2700000 Depreciation Beton ISOTO00 500000 TODO Vale Total expenses 55.750,000 33.150,000 $80,000 Operating income 10750.000 850,000 $100,000 165) Me At the President of TSS.rawwe the financial statement and thought the company should crop the long havice because it was found money. The Controle of TSS new the company would led the two station and warehouse labor for the everydice and those costs would be avoide. However, the Vice escort for Finance said the roup space could probably rent for $4500.000 any and the long haid could be sold for about 3 month QUESTIONS REQUIRED Aricing Problem-wise comowy consider cropang long-haul Bucking segment? What ctors would they want to consider before doing so? Whe we lors such as e-Computer med hvite for severlopen en houtenice not your year of land for the subsequent years BE SURE TO SHOW ALL COMPUTATIONS TO RECEIVE CREO Centily Posite Solutions - Based on your was to date other formation provided whetons could be company to address management conce and mure the long term has company Name as many as you can think of given their formation in the problem O Hecommend Solutions - Based on your findings would you recommend Strap or rette longOf the posts you name in the nich Then will be wait to you for grading Question: Decision Making. The Case of Tri-State Shipping (TSS) Please read the case carefully and be sure that you answer all questions asked in the required section to receive full credit. You can solve the questions in a word or excel file. Then NOT FORGET TO upload or submit your file (word, excel, pdf) to the link below. Th-State Shipping (TSS) operates a transportation company that offers two services between Chicago and the Twin Cities: long-haul freight and intro-city package delivery The company currently operates 20 long haul tractor trallers and a local delivery vans. The company employs 15 long haul drivers and 30 delivery van drivers. Recently, due to COVID-19, TSS has been contracted by several grocery store chains to provide local grocery delivery. This is being handled by the intra-city package delivery segment. It is unknown whether the demand for this service will continue post-pandemic TSS must maintain a station to each cay to receive and load freight for both services. The company employs 20 warehouse taborers. Annual operating costs for the two stations are $2.000.000, excluding labor and depreciation. All station costs are allocated equally between the long haul and delivery services. TSS's revenue is a function of miles driven and averages $5 per mile for the long-haul freight services. Revenue for the intro-city package delivery service averages about $8 per mile. The TSS segmented Income statement for last year is below. Long Haul Package Revenue: Freight Delivery Total Long-haul faverage 55 $5,000,000 $5,000,000 per mile) Delivery (verage 58 $4.000000 4,000,000 per mile) Total Revenue $5,000,000 $4,000,000 $9,000,000 Expenses Driver Labor $1,000,000 $900,000 319007000 Warehouse labor 250.000 250,000 500,000 located Vehicle Operating costs 2.000.000 500,000 2.500.000 Station Operating costs 1000000 TOOOOOO 2000000 Depreciation stations & 1500000 voodoo 2000.000 Veiches) Total expenses $5,750,000 $3,150,000 $8.900,000 Operating income 5075070001 BS0000 $100,000 (L.) 1:50 Mr. Axel, the President of TSS.reviewed the financial statement and thought the company should drop the long-haul service because it was losing money. The Controller of TSS knew the company would still need the two stations and warehouse labor for the delivery service and that those costs would be unavoidable. However, the Vice- President for Finance said the freed-up space could probably rent for $1500,000 annualy and the existing long-haul trucks could be sold for about $3 million cash, QUESTIONS/REQUIRED A. Articulating the Problem - Why is the company considering dropping the long-haul trucking segment? What factors would they want to consider before doing so? Who are the stakeholders in such a decision? 8. Evidence - Compute the financial advantage (or disadvantage of dropping the long-haul service next year (year of sale) and for the subsequent years) BE SURE TO SHOW ALL COMPUTATIONS TO RECENE CREDIT C. Identify Possible Solutions - Based on your answers to and b, and the other information provided what options could the company take to address management's concerns and ensure the long-term health of the company? Narne as many as you can think of given the information in the problem, D. Recommend Solutions - Based on your findings, would you recommend TSS drop or retain the long-haul service of the potential solutions you named in letter c, which would you recommend the company take? Explain why you reached your decision Further Explanation: Remember the relevant avoidable and intelevant unavoidable) cost concepts that you have learned in Chapter 12-Decision Making Pinancial Advantage Disadvantage Analysis of Dropping the long haut segment Consider the positive and negative effects of dropping the long hour service segment from the perspective of revenue loss and cost saving When you talkrastom about the possible solutions, you can use the information provided on the segmented income statement and in the case - Stakeholders are the groups of people who may get affected by the dech of the com Help Save & Eat Submit 1 1 5 Question: Decision Making. The Case of Tri-State Shipping (TSS) Please read the case carefully and be sure that you answer all questions asked in the required section to receive full credit. You can solve the questions in a word or excel file. Then NOT FORGET TO upload or submit your file/word, excel pol) to the Ink below Tri-State Shipping (155) operates avantportation company that offers two services between Chicago and the Twin Cutes tong-haul troint and intra city package delivery The company currently operates 20 tong haul actor trailers and 30 local delvery vans. The company employs 15 long haul drivers and 30 delivery van drivers Recent due to Covo TS has been contracted by several grocery store chans to provide local grocery delivery. This is being handled by the Intercity package delivery segment. It is unknown whether the demand for this service will continue pestandeme TSS must maintain station in each cly to receive and load freight for both services. The company employs 20 warehouse borers. An operating costs for the two stations we $2.000.000, excluding brand depreciation. All station is wealocated equally between the long haul and delivery services TSS's revenues per mile. The TSS segmented income statement for fast year is below. function of miles driven and veriges $5 per me for the song. Hul height services. Revenue for the intra-city package delivery service averages about $8 Long Haul Package Reve Freight Delivery Total long-haulage 35 350.000 $5.000000 per me Delivery average 38 34000000 4000.000 Dermed Total Revenue $5.000.000 $4,000,000,000,000 Expenses Ditabor 31000000 00000 bodo Varehoune or 250,000 266000 OOOOO socied Veeting Cou FOTO S00000 VODO Station Operating costs 100000 2700000 Depreciation Beton ISOTO00 500000 TODO Vale Total expenses 55.750,000 33.150,000 $80,000 Operating income 10750.000 850,000 $100,000 165) Me At the President of TSS.rawwe the financial statement and thought the company should crop the long havice because it was found money. The Controle of TSS new the company would led the two station and warehouse labor for the everydice and those costs would be avoide. However, the Vice escort for Finance said the roup space could probably rent for $4500.000 any and the long haid could be sold for about 3 month QUESTIONS REQUIRED Aricing Problem-wise comowy consider cropang long-haul Bucking segment? What ctors would they want to consider before doing so? Whe we lors such as e-Computer med hvite for severlopen en houtenice not your year of land for the subsequent years BE SURE TO SHOW ALL COMPUTATIONS TO RECEIVE CREO Centily Posite Solutions - Based on your was to date other formation provided whetons could be company to address management conce and mure the long term has company Name as many as you can think of given their formation in the problem O Hecommend Solutions - Based on your findings would you recommend Strap or rette longOf the posts you name in the nich Then will be wait to you for grading Question: Decision Making. The Case of Tri-State Shipping (TSS) Please read the case carefully and be sure that you answer all questions asked in the required section to receive full credit. You can solve the questions in a word or excel file. Then NOT FORGET TO upload or submit your file (word, excel, pdf) to the link below. Th-State Shipping (TSS) operates a transportation company that offers two services between Chicago and the Twin Cities: long-haul freight and intro-city package delivery The company currently operates 20 long haul tractor trallers and a local delivery vans. The company employs 15 long haul drivers and 30 delivery van drivers. Recently, due to COVID-19, TSS has been contracted by several grocery store chains to provide local grocery delivery. This is being handled by the intra-city package delivery segment. It is unknown whether the demand for this service will continue post-pandemic TSS must maintain a station to each cay to receive and load freight for both services. The company employs 20 warehouse taborers. Annual operating costs for the two stations are $2.000.000, excluding labor and depreciation. All station costs are allocated equally between the long haul and delivery services. TSS's revenue is a function of miles driven and averages $5 per mile for the long-haul freight services. Revenue for the intro-city package delivery service averages about $8 per mile. The TSS segmented Income statement for last year is below. Long Haul Package Revenue: Freight Delivery Total Long-haul faverage 55 $5,000,000 $5,000,000 per mile) Delivery (verage 58 $4.000000 4,000,000 per mile) Total Revenue $5,000,000 $4,000,000 $9,000,000 Expenses Driver Labor $1,000,000 $900,000 319007000 Warehouse labor 250.000 250,000 500,000 located Vehicle Operating costs 2.000.000 500,000 2.500.000 Station Operating costs 1000000 TOOOOOO 2000000 Depreciation stations & 1500000 voodoo 2000.000 Veiches) Total expenses $5,750,000 $3,150,000 $8.900,000 Operating income 5075070001 BS0000 $100,000 (L.) 1:50 Mr. Axel, the President of TSS.reviewed the financial statement and thought the company should drop the long-haul service because it was losing money. The Controller of TSS knew the company would still need the two stations and warehouse labor for the delivery service and that those costs would be unavoidable. However, the Vice- President for Finance said the freed-up space could probably rent for $1500,000 annualy and the existing long-haul trucks could be sold for about $3 million cash, QUESTIONS/REQUIRED A. Articulating the Problem - Why is the company considering dropping the long-haul trucking segment? What factors would they want to consider before doing so? Who are the stakeholders in such a decision? 8. Evidence - Compute the financial advantage (or disadvantage of dropping the long-haul service next year (year of sale) and for the subsequent years) BE SURE TO SHOW ALL COMPUTATIONS TO RECENE CREDIT C. Identify Possible Solutions - Based on your answers to and b, and the other information provided what options could the company take to address management's concerns and ensure the long-term health of the company? Narne as many as you can think of given the information in the problem, D. Recommend Solutions - Based on your findings, would you recommend TSS drop or retain the long-haul service of the potential solutions you named in letter c, which would you recommend the company take? Explain why you reached your decision Further Explanation: Remember the relevant avoidable and intelevant unavoidable) cost concepts that you have learned in Chapter 12-Decision Making Pinancial Advantage Disadvantage Analysis of Dropping the long haut segment Consider the positive and negative effects of dropping the long hour service segment from the perspective of revenue loss and cost saving When you talkrastom about the possible solutions, you can use the information provided on the segmented income statement and in the case - Stakeholders are the groups of people who may get affected by the dech of the com
