Sanchez Trucking has been experiencing delays at its warehouse operations. Management hired a consultant to find out

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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 6 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 $3,200 per week in wages and benefits, while a crew of short-term employees costs $5,000 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:

Sanchez Trucking has been experiencing delays at its warehouse o

If the consultant wants to offer a solution that minimizes the expected weekly costs for Sanchez have many work crews should Sanchez have on its permanentpayroll?

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Operations management processes and supply chain

ISBN: 978-0136065760

9th edition

Authors: Lee J Krajewski, Larry P Ritzman, Manoj K Malhotra

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