• Reep Construc-on recently won a contract for the excava-on and site prepara-on of a
  new rest area on the Pennsylvania Turnpike. In preparing his bid for the job, Bob Reep,
  founder and president of Reep Construc-on, es-mated that it would take four months
  to perform the work and that 10, 12, 14, and 8 trucks would be needed in months 1
  through 4, respec-vely.
  The Hrm currently has 20 trucks of the type needed to perform the work on the new
  project. These trucks were obtained last year when Bob signed a long-term lease with
  PennState Leasing. Although most of these trucks are currently being used on exis-ng
  jobs, Bob es-mates that one truck will be available for use on the new project in month
  1, two trucks will be available in month 2, three trucks will be available in month 3, and
  one truck will be available in month 4. Thus, to complete the project, Bob will have to
  lease addi-onal trucks.
• Reep Construc-on recently won a contract for the excava-on and site
  prepara-on of a new rest area on the Pennsylvania Turnpike. In preparing his
  bid for the job, Bob Reep, founder and president of Reep Construc-on,
  es-mated that it would take four months to perform the work and that 10, 12,
  14, and 8 trucks would be needed in months 1 through 4, respec-vely.
  The Hrm currently has 20 trucks of the type needed to perform the work on the
  new project. These trucks were obtained last year when Bob signed a long-term
  lease with PennState Leasing. Although most of these trucks are currently being
  used on exis-ng jobs, Bob es-mates that one truck will be available for use on
  the new project in month 1, two trucks will be available in month 2, three
  trucks will be available in month 3, and one truck will be available in month 4.
  Thus, to complete the project, Bob will have to lease addi-onal trucks.
  Bob Reep would like to acquire a lease that would minimize the cost of
  mee-ng the monthly trucking requirements for his new project, but he
  also takes great pride in the fact that his company has never laid oP
  employees. Bob is commiQed to maintaining his no-layoP policy; that
  is, he will use his own drivers even if costs are higher.
  Managerial Report
  Perform an analysis of Reep Construc-on’s leasing problem and prepare a report for Bob Reep that
  summarizes your Hndings. Be sure to include informa-on on and analysis of the following items:
  1. The op-mal leasing plan
  2. The costs associated with the op-mal leasing plan
  3. The cost for Reep Construc-on to maintain its current policy of no layoPs

Length of Lease 1 Cost per Month ($) 4000 2 3700 3 3225 4 3040