Reference no: EM13918021

Executive Summary

Superior Grain Elevator, Inc. a company located in Canada's third busiest port (Thunder Bay) dedicated to storing and loading grain from local silos into freighters, with its 14 giant grain elevators in the two current wharfs, is one of the most prominent companies on the port. The company is responsible for sending millions of tons of grain to the Eastern part of Canada and also overseas. In average, Superior handled 3.5 ships per week and tried to arrange ships to arrive at the port in a steady stream. But unfortunately the arrival times were sometimes variable and forced some ships to anchor while both wharfs were busy costing them $2,000 per day and ship or in other words, a demurrage charge.
The company has recently learned that a new contract has been placed that will greatly increase the volume of shipment of grain coming into the facility, forcing them to analyze that the current loading capacity with only two wharfs was not going to be enough to keep up with the contract, so a third wharf estimated to cost $1,500,000 seemed like a positive outcome. In order know if this was a profitable option that would make at least a 20% ROI in eight months a thorough analysis was necessary to find out if the benefits and savings would be higher than the cost of building it.

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Executive Summary
ABAZ is seeking an accurate and easy way to monitor the quality performance of the Customer Service Agents (CSRs) in its call center. One quality monitoring option, control charts, requires that the data be normally distributed. Tests were conducted on a random sample of quality data that was collected to determine if it meets this requirement.
After completing several types of analysis, both numerical and visual, it can be concluded that the data is not normally distributed. Thus, this dataset should not be used to construct control charts without taking steps to either find a method to normalize the data, if possible, or another method of quality assessment and monitoring should be used.
SUPERIOR GRAIN ELEVATOR, INC.

EXECUTIVE SUMMARY

Superior Grain Elevator was located at Thunder Bay, Ontario, Canada's third busiest port. With 14 giant grain elevators, Superior was able to load ships constantly sending grain to all parts of Eastern Canada and the globe. The ships were contracted for by agents who lined up the required tonnage of shipping capacity to fulfill the various contracts held with Superior. Although the agents tried to arrange for ships to arrive at Thunder Bay in a steady stream, the vagaries of lockage transfer times in the Seaway resulted in quite variable arrival times, at times forcing arriving ships to anchor when both wharfs were busy. This resulted in SGE having to incur demurrage charges at a rate of $2000 per day. Mike Armstrong, manager of port facilities for SGE, had just learned that the Canadian Government had negotiated a 5-year contract with Poland, and that Superior had been allocated some of the shipments. However, the two wharfs Superior currently had might not be enough to carry out the contract efficiently, and building a third wharf was being considered. The third wharf was estimated to cost $1,500,000. Superior Grain Elevator needs to consider the pros and cons of building a third wharf and decide if the benefits & savings will offset the cost of the investment.

After careful consideration and analysis, using the ROI, NPV, FV formulas and @Risk, we do not recommend for SGE to build a third wharf. Even though the construction of the third wharf will provide the company a mean of savings of $230,115 per season, or $1,150,575 in five years, it does not offset the cost of building the new wharf ($1,500,000).

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