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A Businessman Is Considering Opening a Small Specialized Trucking Firm

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A businessman is considering opening a small specialized trucking firm.To make the firm profitable,it must have a daily trucking capacity of at least 84,000 cubic feet.Two types of trucks are appropriate for the specialized operation.Their characteristics and costs are summarized in the table below.Note that truck two requires three drivers for long haul trips.There are 41 potential drivers available,and there are facilities for at most 40 trucks.The businessman's objective is to minimize the total cost outlay for trucks. A businessman is considering opening a small specialized trucking firm.To make the firm profitable,it must have a daily trucking capacity of at least 84,000 cubic feet.Two types of trucks are appropriate for the specialized operation.Their characteristics and costs are summarized in the table below.Note that truck two requires three drivers for long haul trips.There are 41 potential drivers available,and there are facilities for at most 40 trucks.The businessman's objective is to minimize the total cost outlay for trucks.   ​ Solve the problem graphically and note that there are alternative optimal solutions.  a.Which optimal solution uses only one type of truck? b.Which optimal solution utilizes the minimum total number of trucks? c.Which optimal solution uses the same number of small and large trucks?
Solve the problem graphically and note that there are alternative optimal solutions.
a.Which optimal solution uses only one type of truck?
b.Which optimal solution utilizes the minimum total number of trucks?
c.Which optimal solution uses the same number of small and large trucks?


Definitions:

Allowance Method

An accounting technique that estimates and sets aside a portion of accounts receivable deemed uncollectible as an allowance for doubtful accounts.

Account Receivable

Money owed to a business by its customers for goods or services that have been delivered but not yet paid for.

Total Current Assets

The sum of all assets expected to be converted into cash, sold, or consumed within one year or the normal operating cycle, whichever is longer.

Allowance for Doubtful Accounts

A contra-asset account used to estimate the portion of a company's accounts receivable that may not be collectible.

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