Question: PLEASE SHOW ALL CALCULATIONS FOR BETTER UNDERSTANDING Order Fulfillment Process 9. Wingman Distributing Company is expanding its supply chain to include a new distribution hub

PLEASE SHOW ALL CALCULATIONS FOR BETTER

PLEASE SHOW ALL CALCULATIONS FOR BETTER UNDERSTANDING

Order Fulfillment Process 9. Wingman Distributing Company is expanding its supply chain to include a new distribution hub in South Bend. A key decision involves the number of trucks for the facility. The particular model of truck Wingman is considering can be used 8,000 miles a month and will cost $1,500 a month in capital costs. In addition, each mile a truck is used costs $0.90 for maintenance. A local truck rental firm will rent trucks at a cost of $1.40 per mile. Given the distribution of likely requirements for trucks, management has come up with three alternatives to consider as shown in the table: Monthly requirements (miles) 40,000 80,000 120,000 Probability 0.30 0.40 0.30 Fleet size (trucks) 5 10 15 Which fleet size will yield the lowest expected monthly costs for Wingman

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