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SendBad company works in last - mile deliveries. It aims at delivering packages around 5 pm . If ashipment is late by 1 hour, the

SendBad company works in last-mile deliveries. It aims at delivering packages around 5 pm. If ashipment is late by 1 hour, the company compensates customers in the form of $10 rebate. ATaguchi loss function in the form of k(y m)2 is used in order to deter the company frommissing the target time. If y, the actual delivery time, is smaller than the target m, the companyis overzealous and, although this makes customers happy, it adds an unnecessaryburden/cost for the company. If y is larger than m, the delivery is late and the functionmeasures a penalty for the customer dissatisfaction.On the other hand, the company estimates the cost of its delivery process as a linear functionas follows: Designing the delivery process to meet the 5 pm time target results in a cost of $25 perdelivery. But this cost decreases linearly, and can be stated as 256(y-m), where m is the targettime and y m measures the deviation from the target time.The two functions put together yield a total cost of: TC = k(y m)2+256(y-m)1. Determine the value of k, whereby you measure the deviation in (y m) in hours.2. What cost does the company incur per delivery if it sticks to its target (5 pm), i.e. it isneither ahead nor late.3. What is the cost in the function TC above if the company delivered packages at 4 pm,i.e. one hour ahead of its original target.4. What is an ideal deviation from the original target (5 pm) that the company shouldconsider.5. What is the total cost, if the company performed with this ideal deviation that youcomputed in Question 4.

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