Key Business Questions

1. How would the performance of these commodities affect the size and timing of shipping arrangements?
2. How would the value of new shipping arrangements affect the value of our business with our current customers?
3. How would we manage the allocation of existing resources given we have just landed in this new market?

Responses to Business Questions

1. The performance of these commodities could affect the size and timing of shipment arrangements because the Freight Forwarder has ships on standby currently but only $250 million is allocated to receiving. The Tramp ships is the company’s flexible option but due to the volatility of the market shipments could be halted due to increased value of commodities. During the periods commodities are performing well, this could result in slower and smaller shipment for existing customers.

2. With the increase of our value with the new shipping arrangements, during the periods nickel performing well our ship overbooked. We can’t accommodate both new and existing customers with the current $250 million receiving allocation. We must increase our allocation or customers will suffer.

3. It’s imperative to allocate the majority of our resources to the existing business because it’s our core. Also, due to the volatility of nickel we shouldn’t allocate too much resources and risk losing our existing customers.

Supporting Data

              nickel       copper    aluminium
nickel     1.0000000 -0.114838413  0.101273327
copper    -0.1148384  1.000000000 -0.003052345
aluminium  0.1012733 -0.003052345  1.000000000

	mean	median	std_dev	IQR	skewness	kurtosis
copper.size	0.8830	0.6823	0.7849	0.9217	1.7713	7.8654
aluminium.size	0.8072	0.5510	0.8986	1.0136	1.8899	8.4006
nickel.dir	0.0447	1.0000	0.9959	2.0000	-0.0895	1.0150
copper.dir	0.0540	1.0000	0.9931	2.0000	-0.1081	1.0235

[1] 1.282969