Decision of Uncertainty

Decision of Uncertainty

Douglas Doss

QNT/561

March 5, 2012

Gerald Heidt

Decision of Uncertainty

E & J Gallo Winery ships wine and spirit products to their regional distribution centers (RDC) for distribution to their retail outlets. The shipment methods used are truck, rail, and intermodal. The number of in-transit damage claims continues to increase for the products shipping to the Georgia RDC via railcar using the Route A transportation template. The Winery leverages the Burlington Northern Santa Fe (BNSF) and Union Pacific (UP) railroad carriers. The decision of uncertainty that the Global Supply Chain Logistics Group wishes to address is should the Winery continue shipping product to Georgia via rail using the Route A transportation template.

Research. The first step in the research process is to clearly understand the research question that needs to be answered. In this case is the question is what is the probability of product being damaged in- transit via railcar to the Georgia RDC using the Route A transportation template. The next step is to identify the sampling design to leverage and collect and analyze the pertinent data. To perform this research the team will leverage the simple random sampling method. Simple Random Sampling refers to a sample selected so that each item in the population has the same chance to be included (Lind, Marchal, & Wathen, 2008). The population data for this research is the shipments to the Georgia RDC, via the rail mode of transportation, using the Route A transportation template for the year 2011. For this specific research case the Gallo team will sample the entire population. The research yielded the following: In 2011, there were 27 reports of in-transit product out of the 437 rail cars transported to the Georgia RDC. All of the reported in-transit damage claims were against the BNSF rail carrier which delivered 400 of the 437 railcars. No claims were filed against the Union Pacific...