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Transportation manager is expecting two barges to arrive the next day at the river port. The transportation manager is concerned whether the two barges will
Transportation manager is expecting two barges to arrive the next day at the river port. The transportation manager is concerned whether the two barges will arrive on schedule. Each barge has two FEU containers. The transportation manager knows that the barges may get delayed due to congestion at the upstream locks. The transportation manager also knows that the company must contract for third party logistics (3PL) trucking company to pick up the containers. The transit and delivery fees are fixed based on the load and distance (these costs are not part of the immediate considerations). The dilemma is that fewer than two barges may arrive, exactly two barges may arrive, or more than two barges may arrive. There is significant uncertainty. The transportation manager has to pay fees for storing the containers at the dock if there are insufficient trucks to transport the containers from the docks upon arrival or the transportation manager has to pay fees to the 3PL trucking company if there are insufficient containers for the waiting trucks and some of the trucks have to return to their terminals empty. The storage fee at the port is $100 per container per day. The "empty truck return" fee
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