Sanchez Trucking has been experiencing delays at its warehouse operations. Management hired a consultant to find out why service deliveries to local businesses have taken longer than they should. The consultant narrowed down the problem to the number of work crews loading and unloading trucks. Each crew consists of 7 employees who work as a team on a variety of tasks; each employee works a full 40 hours a week. However, costs are also a concern. The consultant advised management that they could supplement work crews with short-term employees, at a higher cost, to cover unexpected needs on a weekly basis. Each work crew permanently hired by Sanchez costs $3,500 per week in wages and benefits, while a crew of short-term employees costs $6,000 per week. Complicating the decision is the fact that the weekly hourly requirements for work crews is uncertain because of the volatility in the number of deliveries to be made. Deliberating with management, the consultant arrived at the following data. Requirements (man-hours) Probability Number of crews 560 0.1 2 840 0.3 3 1,120 0.3 4 D work crews is the lowest cost alternative, with expected weekly costs to Sanchez of $ 1,400 0.3 5 If the consultant wants to offer a solution that minimizes the expected weekly costs for Sanchez, how many work crews should Sanchez have on its permanent payroll? A payroll containing (Enter your responses as integers.)
Sanchez Trucking has been experiencing delays at its warehouse operations. Management hired a consultant to find out why service deliveries to local businesses have taken longer than they should. The consultant narrowed down the problem to the number of work crews loading and unloading trucks. Each crew consists of 7 employees who work as a team on a variety of tasks; each employee works a full 40 hours a week. However, costs are also a concern. The consultant advised management that they could supplement work crews with short-term employees, at a higher cost, to cover unexpected needs on a weekly basis. Each work crew permanently hired by Sanchez costs $3,500 per week in wages and benefits, while a crew of short-term employees costs $6,000 per week. Complicating the decision is the fact that the weekly hourly requirements for work crews is uncertain because of the volatility in the number of deliveries to be made. Deliberating with management, the consultant arrived at the following data. Requirements (man-hours) Probability Number of crews 560 0.1 2 840 0.3 3 1,120 0.3 4 D work crews is the lowest cost alternative, with expected weekly costs to Sanchez of $ 1,400 0.3 5 If the consultant wants to offer a solution that minimizes the expected weekly costs for Sanchez, how many work crews should Sanchez have on its permanent payroll? A payroll containing (Enter your responses as integers.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Sanchez Trucking has been experiencing delays at its warehouse operations. Management hired a consultant to find out why service deliveries to local businesses
have taken longer than they should. The consultant narrowed down the problem to the number of work crews loading and unloading trucks. Each crew consists of 7
employees who work as a team on a variety of tasks; each employee works a full 40 hours a week. However, costs are also a concern. The consultant advised
management that they could supplement work crews with short-term employees, at a higher cost, to cover unexpected needs on a weekly basis. Each work crew
permanently hired by Sanchez costs $3,500 per week in wages and benefits, while a crew of short-term employees costs $6,000 per week. Complicating the decision
is the fact that the weekly hourly requirements for work crews is uncertain because of the volatility in the number of deliveries to be made. Deliberating with
management, the consultant arrived at the following data.
Requirements (man-hours)
Probability
Number of crews
560
0.1
2
840
0.3
3
1,120
0.3
4
1,400
0.3
5
If the consultant wants to offer a solution that minimizes the expected weekly costs for Sanchez, how many work crews should Sanchez have on its permanent
payroll?
A payroll containing
work crews is the lowest cost alternative, with expected weekly costs to Sanchez of $
(Enter your responses as integers.)
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