Priscilla Bailey manages a fleet of 225 delivery trucks for Greely Corporation.

Question

Priscilla Bailey manages a fleet of 225 delivery trucks for Greely Corporation.

Priscilla Bailey manages a fleet of 225 delivery trucks for Greely Corporation. Bailey performed the following analysis: EEB (Click the icon to view the outsourcing decision analysis.) Read the requirements (Click the ioon to view additional information.) Requirement 1. Which altemative will maximize Greely's short-term operating income? In order to maximize short-term operating income, Greely Corporation should because the variable cost of outsourcing to FMS results in of $ Data Table More Info Retain In-HouseOutsource To FMS Difference Bailey must decide whether the company should outscurce the fleet management function. If she outsources to Fleet Management Services (FMS), FMS will be responsible for maintenance and scheduling activities. This alternative would require Bailey to lay off her five employees. However, her own job would be secure; she would be Greely's liaison with FMS. If she continues to manage the fleet, she will need fleet-management software that costs $8,750 per year to lease FMS offers to manage this fleet for an annual fee of $290,000. 8,750 146,000 $ Annual leasing fee for software Annual maintenance of trucks Total annual salaries of five 8,750 146,000 laid-off employees 170,000 170,000 Fleet Management Service's annual fee 290,000 ,000) Print Done Total differential cost of 324,750 $ 290,000 S 34,750 Print Done

Explanation / Answer

a) Outsource to FMS

b)Savings/additional contribution

c)34.750

The data table shows that cost of Retail in-house will cost 324,750 while Outsource to FMS will cost 290,000 and there would be saving of 34.750 from Outsourcing

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.