Priscilla Smiley manages a fleet of 250 delivery trucks for Daniels Corporation. (Click the icon...
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Priscilla Smiley manages a fleet of 250 delivery trucks for Daniels Corporation. (Click the icon to view additional information.) Smiley performed the following analysis: (Click the icon to view the outsourcing decision analysis.) Read the requirements. Requirement 1. Which alternative will maximize Daniels's short-term operating income? In order to maximize short-term operating income. Daniels Corporation should because the variable cost of outsourcing to FMS results in of More info Smiley must decide whether the company should outsource 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 Smiley to lay off her five employees. However, her own job would be secure; she would be Daniels's liaison with FMS. If she continues to manage the fleet, she will need fleet-management software that costs $9,500 per year to lease. FMS offers to manage this fleet for an annual fee of $300,000. Data table
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