Laura Moody manages a fleet of $200$ delivery trucks for Yankey Corporation.

Moody performed the following analysis:

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$($Click the icon to view the outsourcing decision analysis.$)$

Read the requirements.

Requirement $1.$ Which alternative will maximize Yankey's short$-$term operating income?

In order to maximize short$-$term operating income, Yankey Corporation should

because the variable cost of outsourcing to FMS results in

of

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Moody must decide whether the company should outsource the fleet management

function. If she outsources to Fleet Management Services $($FMS$),$ FMS will be

responsible for maintenance and scheduling activities. This alternative would

require Moody to lay off her five employees. However, her own job would

be secure; she would be Yankey's liaison with FMS$.$ If she continues to manage

the fleet, she will need fleet$-$management software that costs $$9,500$ per year to

lease. FMS offers to manage this fleet for an annual fee of $$285,000.$