Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
12th Edition
ISBN: 9780134741062
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Textbook Question
Chapter 14, Problem 11P
Acadia Logistics anticipates that it will need more distribution center space to accommodate what it believes will be a significant increase in demand for its final—mile services. Acadia could either lease public warehouse space to cover all levels of demand or construct its own distribution center to meet a specified level of demand, and then use public warehousing to cover the rest. The yearly cost of building and operating its own facility, including the amortized cost of construction, is $12.00 pa” square foot. The yearly cost of leasing public ware house space is $20.00 per square foot. The expected demand requirements follow:
- Calculate the expected value of leasing public warehouse space as required by demand.
- Calculate the expected value of building a 200,000-square-foot distribution center and leasing public warehouse space as required if demand exceeds the need for 200,000 square feet of space.
- Calculate the expected value of building a 300,000-square-foot distribution center and leasing public warehouse space as required if demand exceeds the need for 300,000 square feet of space.
- Calculate the expected value of building a 400,000-square-foot distribution center and leasing public warehouse space as required if demand exceeds the need for 400,000 square feet of space.
- Calculate the expected value of building a 500,000-square-foot distribution.
- Which of these decisions provides the minimized expected value?
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Acadia Logistics anticipates that it will need more distribution center space to accommodate what it believes will be a significant increase in demand for its final-mile
services. Acadia could either lease public warehouse space to cover all levels of demand or construct its own distribution center to meet a specified level of demand,
and then use public warehousing to cover the rest. The yearly cost of building and operating its own facility, including the amortized cost of construction, is $15.00 per
square foot. The yearly cost of leasing public warehouse space is $24.50 per square foot.
E Click the icon to view the expected demand requirements.
a. The expected value of leasing public warehouse space as required by demand is $ 10290000 . (Enter your response as a whole number.)
b. The expected value of building a 230,000-square-foot distribution center and leasing public warehouse space as required if demand exceeds the need for
230,000 square feet of space is $ (Enter your response…
Acadia Logistics anticipates that it will need more distribution center space to accommodate what it believes will be a significant increase in demand for its final-mile
services. Acadia could either lease public warehouse space to cover all levels of demand or construct its own distribution center to meet a specified level of demand,
and then use public warehousing to cover the rest. The yearly cost of building and operating its own facility, including the amortized cost of construction, is $15.00
per square foot. The yearly cost of leasing public warehouse space is $24.50 per square foot.
E Click the icon to view the expected demand requirements.
a. The expected value of leasing public warehouse space as required by demand is S
(Enter your response as a whole number.)
More Info
Requirements (in sq. ft)
Probability
230,000
430,000
630,000
830,000
0.35
0.4
0.2
0.05
Print
Done
Corral Cartage leases trucks to service its shipping contracts. Larger trucks have cheaper operating costs if there is sufficient
business, but are more expensive if they are not full. CC has estimates of monthly shipping demand. What comparison method(s)
would be appropriate for choosing which trucks to lease?
Chapter 14 Solutions
Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
Ch. 14 - Prob. 1DQCh. 14 - Prob. 2DQCh. 14 - Prob. 3DQCh. 14 - Prob. 4DQCh. 14 - Prob. 5DQCh. 14 - Prob. 1PCh. 14 - Eight Flags operates several amusement parks in...Ch. 14 - Prob. 3PCh. 14 - Beagle Clothiers uses a weighted score for the...Ch. 14 - Prob. 5P
Ch. 14 - Prob. 6PCh. 14 - Prob. 7PCh. 14 - Prob. 8PCh. 14 - Prob. 9PCh. 14 - Prob. 10PCh. 14 - Acadia Logistics anticipates that it will need...Ch. 14 - Prob. 12PCh. 14 - Prob. 13PCh. 14 - Prob. 1VCCh. 14 - Prob. 2VCCh. 14 - Prob. 3VCCh. 14 - Prob. 4VCCh. 14 - Prob. 1CCh. 14 - Prob. 2CCh. 14 - Prob. 3C
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