Delta Rail Is Considering Adding an Additional Run on Its

question 131

Multiple Choice

Delta Rail is considering adding an additional run on its Hope to Princeton commuter route.The total cost of the additional trip is estimated to be $3,000 of which $1,000 are variable costs.The anticipated extra revenues are $1,800.What should the company do?

• A)Not add the train since the company will make a loss.
• B)Not add the train since the company cannot cover its total fixed costs.
• C)Add the train since the loss is less than its total variable costs.
• D)Add the train since the marginal revenue of the extra run exceeds its marginal cost.

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Definitions:

Network Design

Network Design in supply chain management involves the strategic planning of a logistics network to optimize the flow of goods, information, and resources.

Chained Network

A complex series of interconnected nodes or entities, typically describing a logistics or delivery network.

Supply Disruptions

Interruptions in the flow of goods and materials from suppliers, which can impact production and distribution.

Demand Fluctuations

Variations in the level of demand for goods or services over time, often influenced by seasonal patterns, market trends, or economic factors.