Reference no: EM131620675

Question: At Graphic Express, Inc., Bob is planning to take three managers to a weekly meeting in New York. Traveling from Boston to New York for meetings has been part of the normal course of doing business at Graphics Express for several years, and the travel expenses and wasted time represent a considerable cost to the company. Normally, Bob's managers set up travel arrangements individually and get a reimbursement from the company. Desiring to cut costs and increase productivity, Bob decides to investigate alternative modes of making this weekly trip. He discovered that Amtrak Acela Express costs $178 for the round trip from Boston to New York. A taxi from the train station to the meeting costs about $40. The managers live in different parts of Boston, so carpooling in one car has not worked well; however, if two of the managers drive the 440-mile round-trip drive and each takes one of the other managers, the process might be manageable, and the cost is only the mileage reimbursement of $167 plus $25 parking for each car.

A round trip airline ticket is about $265 if purchased in advance. Although the flight is only about one hour in duration, the total travel time when flying from home to the New York office is about the same as when driving-the trip takes between three and four hours depending on traffic. The taxi from the airport to the meeting costs about $40. A new service called Limo Liner, a sort of bus with upgrades, advertises that round-trip cost is about $40 less than an Amtrak ticket, and they offer extra services including a kitchen, TVs, restrooms, and a conference table that can be reserved. A taxi from the Limo Liner terminal to the meeting will cost around $20. In the past, most of the managers have flown to the meeting-citing the ability to work en route as a productivity advantage. The idea of using the Limo Liner intrigues Bob. He likes the idea that he and his managers could work together while they travel but wonders if this feature is worth the expense.

1. What is the cost of Bob and his three managers traveling by each method: by Amtrak with two taxi fares in New York, in individual cars including parking, carpooling in two cars including parking, by airplane with two taxi fares in New York, and by Limo Liner with two taxi fares in New York?

2. In the past, costs for the trip have totaled around $1,140 per trip for the group of four people using different methods of traveling to New York. Bob thinks he and his managers should probably drive in two cars to save the most money, but he is still intrigued by the possibility of conducting a meeting on the Limo Liner while traveling to New York. How much will the company save with either of these options? Which method of travel might yield the most productivity increase?