Hardee Transportation Concept, Case Study Example

The estimated moving costs for Hardee include $2.10 per gallon of diesel used to fuel the tractors and a quarter gallon of fuel for 6.5 miles covered by a line haul tractor. The whole trip from the office to the final destination amounts to 1304 miles (that is to say the sum of 20+20+481+399+369+15). The total cost of gallons of fuel consumed amounts to ¼ (1304/6.5) equaling ¼(200.615) gallons. Since a gallon of fuel costs $2.10 the total cost of fuel over 1304 miles comes down to the number of gallons multiplied by the cost per gallon, in mathematical terms ¼ (200.615) x 2.10.

In terms of maintenance, the total amount associated with maintaining the drivers is ¼ $3104.76 (meaning ¼$0.42×1304). The maintenance per mile equals ¼ $(1304/0.15).

The line haul tractor costs ¼$80,000, making the total line haul cost ¼$84818.33

(or ¼$80000 + ¼$8693.33 + ¼$3104.76 + ¼$845 and subsequently ¼$(80000+869.33+3104+845).

The pickup cost will be equal to the cost of two docks in addition to the cost of (PUD) drivers per hour. The total cost for two docks per hour comes down to ¼ $50 (or 2×1/4$25). The total cost for loading each dock in three hours is ¼$300.

The pickup cost of drivers for three hours amounts to ¼ $90 (or ¼ $30×3). The total pickup cost therefore will come down to ¼ $390 (or ¼ $ (300+90))

The sorting cost amounts to the total time taken to sort multiplied by the total cost of docks. Time taken for sorting is estimated as 8 hours. Each dock is paid ¼ $25 per hour, in other words ¼ $200 (or ¼$25×8).

Since there are two docks involved the sorting process, this would amount to ¼ $400.

The total cost associated with the whole moves results in adding together all the costs that were incurred individually during the moving process. To sum it up, the total cost is the sum of all costs, that is to say the following:

• The Insurance cost per mile is ¼ $0.05
• The total number of miles covered equals 1304, therefore the total cost is ¼$(1304×0.05)
• The billing cost per fright bill is ¼ $5.00
• The dock facility costs ¼ $ 15 per hour.

All in all the total of all costs is ¼$86385.33 (or ¼$84818.33+1/4$(390) + ¼$400+¼$(1304×0.05) + 1/4$5.00+1/4$ 120 =1/4$(84818.33+390+400+652+5+120)

The total cost will increase because not only will the additional driver will be worth the same amount as the additional driver, but they will also be doing the same job in the same tractor but at different times. The line haul expanse will increase and as a result the total cost will increase as well. Adding another driver will only speed up the transportation process but will not in any case be used as a means of lowering the total expenses incurred in the move (John, Coyle, Robert, Navick, Gibson 2010).

If Hardee lacks backhaul to return the vehicle and the driver to Pittsburg, they will encounter more chargers in this move although less than the first move. Since this is a business each cost must be accounted for so that profits are maximized. The cost incurred as a result of empty haul should be accounted for as motor carrier cost since this cost is the one that caters for transportation of the products from the premised to the market place. This cost cannot be avoided and therefore must be technically handled so that it may not consume much of the profit. Because the vehicles must use fuel, drivers must be paid including the taxes and the costs involved in using the public roads as well. Without properly structuring this cost of transport, a company may find that it is running on debts or loses. A method should be devised, whereby the return trips also involve some business activity so that profit is generated to pay the vehicle expenses and the drivers. This will ensure that the business is run properly (David Simchi Levi, Philip Kaminsky, and Edith Simchi Levi, 2010).

References

David, Simchi Levi, Philip Kaminsky, & Edith Simchi Levi (2010). Designing and Managing the Supply Chain: Concepts, Strategies, and Case Studies. Irwin McGraw Hill.

John, J. Coyle, Robert, A. Navick, Gibson (2010) What will happen to total cost? p.528