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Question is in the image attached. Thank you. ABC Trucking Company is a Canadian-own trucking company which provides truckload services across North America. ABC currently

Question is in the image attached. Thank you.

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ABC Trucking Company is a Canadian-own trucking company which provides truckload services across North America. ABC currently provides round-trip service between Toronto (TOR) and Vancouver (VAN). Traditionally, TOR to VAN is a headhaul run priced at $8000 and VAN to TOR is a backhaul run priced at $4000 in open market. The transit time of this lane is 4 days in each direction. As a standard operation, when a truck reaches a trucking terminal, it takes 1 day to offload and load the next shipment and also let drivers take rest before next trip. ABC operates 365 days per year without holidays. ABC recently hired a new Director of Operation, Richard. Richard's vision is to reduce the number of unprofitable backhaul runs and increase the number of profitable headhaul runs. He came up with a new triangular movement strategy by adding Chicago (CHI) as the pivot-point, which happens that VAN to CHI is a headhaul and CHI to TOR is also a backhaul. Here is how the strategy works: . The truck will move from TOR to VAN as normal . The truck then will move from VAN to CHI with 3 days transit time, market priced at $4000 . The truck will move from CHI to TOR with 2 days transit time, market priced at $2000 Assume the annual total costs are the same for both the round-trip and the triangular movements, all prices are set by market and there are enough demands to fill all the trucks in all movements. Draw diagrams of both the proposed movement and the round-trip with proper labels. (2 points) Would you recommend the triangular strategy to the President from the total annual revenue perspective? (10 points) Show your full calculation to support the recommendation. Round up to whole number without dismal in your calculation. Would Cabotage rule affect your decision? Explain why. (2 points)

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