Case Study: Warehousing Tenting at the Port
CCI’s property
of Miami
The Collector’s Choice Inc. (CCI), a luxury
car import company, has an old warehouse
at the Port of Miami, Florida, where it
temporary stores expensive sports cars and
automotive parts that arrive from Europe.
This summer, CCI has noticed that the
termite infestation in the warehouse has
escalated to a point where tenting cannot
be postponed anymore. (Tenting is the
process of wrapping a building inside a
huge tent that is subsequently filled with a
poisonous gas capable of killing most forms
of life inside, including insects, plants, pets,
and human beings.) CCI’s pest control
company’s contract specifies a to-do list of
pre-tenting tasks, which include:
• Turning off all air-conditioning units
and opening all windows of the
warehouse
• Turning off all internal and external
lights, including those operating on a
timer
• Pruning all outdoor vegetation at
least 18” away from the warehouse
• Soaking the soil around the
warehouse on the first day of tenting
The requirement of opening all windows is
particularly worrisome to CCI because it
means turning off the alarm system, leaving
he warehouse vulnerable to burglary for 48
hours – the required amount of time for the
poisonous gas to do its job. Therefore, Alex
Ferrari, the warehouse manager, is thinking
about hiring a security company to monitor
the facility during that period.
insurance deductible is $25,000, and Alex is
assuming that if thieves are willing to enter
a building full of poisonous gas to steal
something, they would certainly take more
than $25,000 worth of parts-or even an
entire car!
After making a few phone calls, Alex gets in
touch with ProGuard, a trustworthy local
security company that charges $150 per
hour to
have a security guard stationed outside
their warehouse. The city of Miami police
records indicate that about 30% of
businesses that left their facilities
unattended during tenting reported stolen
property in the past 3 years. Although Alex
thinks ProGuard’s prices are reasonable,
and having a guard outside the warehouse
would certainly help, he is still not sure
whether it is worth spending the extra
money. After all, ProGuard’s contract does
not guarantee the protection it provides is
infallible. In fact, an analysis of the
company’s records indicates that 3% of
their clients were burglarized over the past
3 years.
Discussion
Questions
1. Create a decision tree analysis to help
decide whether Alex Ferrari should hire
ProGuard’s services.
2. Does your decision based on the tree
guarantee success? Why or why not?