Suppose Ellison Seafood is considering 3 different transportation options to carry its fresh seafood catch for the year. (X = number of shipments / year)
Option 1: Common carrier, not contract: Cost = $750X
Option 2: Contract with local carrier Cost = $5,000 + $300X
Option 3: Leasing: Cost = $21,000 + $50X
Suppose Ellison is investigating 3 demand scenarios regarding in the number of shipments: high demand (80 shipments), medium demand (50 shipments) and low demand (30 shipments). Ellison evaluated the likelihood of high demand at 15%, medium demand at 60% and low demand at 25%.
Required:
Build a decision tree to determine which transportation option should be adopted.
Answers: 2
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Suppose Ellison Seafood is considering 3 different transportation options to carry its fresh seafood...
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