J Koko Hauling is a hauling company based in Pittsburgh.
J Koko had 1 green truck, the cash cow, and 1 black truck, a smaller dump truck. J Koko bought a blue truck this year to earn extra revenue, but was also experiencing hefty cost. If continuing the current situation, the negative impact on cash flow would lead to 19k annual loss.
We proposed 3 possible solutions
1. Cut losses: sell the blue which would result in 19k of annual profit with the original truck
2. Play defense: increase the usage of the blue truck as it is currently operating 2~3 days per week. By utilizing it 5 days per week, the profit could increase to 23k of annual profit.
3. Optimize: maximize the three trucks and utilize all three trucks to its full capacity, which could bring 91k in annual profit.
Carnegie Mellon University - Tepper School of Business
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