The Houston Port Authority has engaged you as a consultant to advise it on possible changes in the handling of wheat exports. It is interested in...

1. The Houston Port Authority has engaged you as a consultant to advise it on possible changes in the handling of wheat exports.  It is interested in evaluating three alternatives as follows.

a)     System A: This is the current system. Presently, .

b)     System B: The first option is to to decrease the number of cars waiting to be unloaded.  In this case, there will be of hopper cars waiting to be unloaded and hence, the to unload the hopper cars. The .

c)     System C: The second option is to automate the unloading process. The proposed system (referred to as the . The initial investment of such a system (amortized over the life of the system) is expected to be

Given the following additional information, help the port authority decide which of the three systems should be chosen so that total expected costs are minimized:

·        The railroad bringing the hopper cars into the dock area charges the port authority $ per hour the time arrival to the time the hopper car returned empty (i.e., cost a function the average cycle time the system the number hopper cars which arrive per day). This cost referred to a demurrage cost.

·        For . For .

·        The and .

·        If necessary, you can .

·        To analyze Systems A and C, the worksheet "1 cap unit - exact or approx" is appropriate; to analyze system B, the "m cap units - exact" worksheet is appropriate.