Bayesian Analysis

-

 

“Would you like a direct service terminal opened in Mexico?”

“Would you like a direct service terminal opened in Ontario, Canada?”

Saia Freight currently does not have any direct service terminals in Mexico or Canada, through the promotional survey Saia will inquire about customers desires to have these terminals built. Current delivery to these countries is done by a partner with less guarantee on transit times. By using Bayesian analysis of these marketing questions Saia can determine the potential viability of expanding expedited services internationally. 

 



P(M | C) = P(M n C) / (P(C)

P(M | C) = .88 / .89

P(M | C) = .98 

The probability of customers who chose yes for building a terminal in Mexico who also chose to build a terminal in Canada would be 98%

P(C | M) = P(C n M) / (P(M)

P(C | M) = .88 / .93

P(C | M) = .95

The probability of customers who chose yes for building a terminal in Canada who also chose to build a terminal in Mexico would be 95%

 

Comments

Post a Comment

Popular posts from this blog

Growth Analysis

-
Image
The current US and Global supply chains are strained to their limits. Analysts say that the lingering effects of COVID-19 mitigation strategies essentially reduced the production of goods and services, and the supply-chain shortages now happening are the result of struggles to return to pre-pandemic levels (Vann, 2021). 4.3 million Americans quit their jobs in August, with the dock and warehouse industry reporting a 490,000 worker shortage (Vann, 2021). With demand for consumer goods up 22% Saia is in a prime position to experience hearty growth in revenue and profit in 2021 (Goodman, 2021).  Saia has experienced steady growth in the stock market with shares averaging $223.47 at close in 2021. As well as a healthy profit and net income growth year over year. Saia's healthy growth pre-pandemic as well as in the early pandemic of 2020 allows for the opportunity to expand their fleet of trucks, trailers, and drivers. Over the road freight bills have increased on average 85% due to ...
Read more

Risk Analysis

-
Image
 Hypothetically speaking if Saia were to increase their driver fleet and demand for trucking services increased as well Saia could potentially see profits increase $1.5 million USD. The risk analysis diagram below shows the potential profits and losses based on the decision to expand the driver fleet or not.  There is a 50% chance that their will be an increase in demand for trucking services, a 30% chance that demand stays at current levels, and a 20% chance that trucking demands will decrease. The EMV, or expected monetary value of Saia's options are listed below. EMV of increasing the driver fleet     Demand goes up: (.50)(1500000) = $750,000     Demand is steady: (.30)(900000) = $270,000     Demand goes down: (.20)(-500000) = -$100,000 EMV= 750,000 + 270,000 + -100,000  = $920,000 EMV of maintaining current fleet     Demand goes up: (.50)(-500000) = -$250,000     Demand is steady: (.30)(500000)...
Read more

Personnel Analysis

-
Image
  The average turn over rate in 2020 for truck drivers in less-than-truckload companies was 13% (CCJ, 2021). As Saia has continued to grow over the last 5 years, so has their labor force, with 10600 employees in 2021 (TTNews, 2021). With the US supply chain under immense strain, increasing Saia's truck driver will be critical in maintaining their market share during these demanding times. However, as shown above Saia's average annual salary for truck drivers is only $79,831 (Indeed, 2021). To attract more drivers during this labor shortage as well as maintain their current fleet Saia should look at increasing truck driver salaries to better compete with other logistics companies such as Estes, Fedex, and UPS.
Read more