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Jack and Jill are planning to start a delivery service (J&J). Jill has proposed three business models. Model A: All packages will be sent to, sorted, and delivered from a main location in St. Louis. For example, if Roberto in New York sends a package to Maria in Boston, it will first travel to J&J's sorting facility in the middle of the country: New York - St. Louis - Boston. Model B: Packages will first be sent to a regional facility. If the destination is served by the regional facility, the regional facility will deliver the package. Otherwise, the package is shipped on to the central facility in St Louis, then on to the regional facility nearest the destination. Finally, the package will be delivered to the destination. Region Regional Facility Major Cities Served Northeast Philadelphia Philadelphia, Boston, New York Baltimore, Washington DC Southeast Charlotte Charlotte, Miami, Tampa, Atlanta, Richmond, Nashville, New Orleans Midwest Chicago Chicago, Detroit, Minneapolis, Columbus, Indianapolis, Des Moines Southwest Dallas Dallas, Houston, Denver, Albuquerque, Oklahoma City, Kansas City West Salt Lake City Salt Lake City, Seattle, Portland, San Francisco, Las Vegas, Phoenix, Los Angeles, San Diego Example: Philadelphia serves the northeast region. Boston and New York are in Philadelphia's region, so the package from Roberto in New York to Maria in Boston would travel from New York - Philadelphia - Boston. This saves time because the package does not travel to St. Louis per Model A. However, if Roberto in New York wants to send a package to Mark in Chicago, the package would travel as follows: New York - Philadelphia - St. Louis - Chicago. Model C: There are no regional or central processing facilities. Packages will travel directly between major cities listed in Model B. A package from Roberto in New York to Maria in Boston will travel directly from New York to Boston. A package from Roberto in New York to Mark in Chicago will travel directly from New York to Chicago. Jack has researched the start-up and ongoing operational costs of each model, and has come up with the following estimates: Model Initial Cost Ongoing Cost per Year A 72,000,000 10,000,000 B 76,000,000 7,000,000 C 96,000,000 4,000,000 8. Which represents the greatest weakness of Model A? Model A a. is a decentralized network and is therefore likely to be more costly than Model B or Model C b. has a single point of weakness that is vulnerable to attack or disruption c. is the easiest to control and change 9. Which represents the greatest strength of Model C? Model C is a. a centralized network and is therefore the most efficient b. the easiest to control and change c. resistant to disruption from weather patterns 10. Jack and Jill are evaluating Model C. Assuming the business is always profitable, which change to the business plan is likely to have the greatest positive impact on the value of the business a. expansion from 32 cities served to 34 cities served b. a 5% reduction in initial costs c. an increase in ongoing costs from $4 million per year to $5 million per year