3. A warehouse handles parcel deliveries for online retailers. The number of parcels received each day...

 

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3. A warehouse handles parcel deliveries for online retailers. The number of parcels received each day by the warehouse is a random variable with the following discrete probability distribution (Table 3). For example, there is a 2.5% probability for the number of parcels in a day to be 1500. Parcels Probability Table 3 1500 2000 2500 3000 3500 4000 4500 5000 5500 6000 2.5% 5% 10% 20% 22.5% 15% 10% 7.5% 5% 2.5% The warehouse employs a team of workers to deliver the parcels. Each worker can deliver 500 parcels per day, and costs the warehouse $300 to hire a worker for a day. In case the number of parcels exceeds the capacity of the workers, the warehouse would outsource delivery of the surplus parcels to a 3rd party logistics company, which charges $5 per parcel for the delivery service. Based on the information provided above, answer the questions below: (a) What is the underage cost for the warehouse to NOT have enough workers? (b) What is the overage cost for the warehouse to have too many workers? (c) How many workers should the warehouse hire? (5 marks) (5 marks) (10 marks) 3. A warehouse handles parcel deliveries for online retailers. The number of parcels received each day by the warehouse is a random variable with the following discrete probability distribution (Table 3). For example, there is a 2.5% probability for the number of parcels in a day to be 1500. Parcels Probability Table 3 1500 2000 2500 3000 3500 4000 4500 5000 5500 6000 2.5% 5% 10% 20% 22.5% 15% 10% 7.5% 5% 2.5% The warehouse employs a team of workers to deliver the parcels. Each worker can deliver 500 parcels per day, and costs the warehouse $300 to hire a worker for a day. In case the number of parcels exceeds the capacity of the workers, the warehouse would outsource delivery of the surplus parcels to a 3rd party logistics company, which charges $5 per parcel for the delivery service. Based on the information provided above, answer the questions below: (a) What is the underage cost for the warehouse to NOT have enough workers? (b) What is the overage cost for the warehouse to have too many workers? (c) How many workers should the warehouse hire? (5 marks) (5 marks) (10 marks)

Answer rating: 100% (QA)

ANSWER The cost of outsourcing per parcel is 5 and the number of surplus parcels is the difference between the total number of parcels and the number of parcels that can be delivered by the workers Ma... View the full answer