1. What are the pick-up, sort, line-haul, and delivery costs to Hardee for this move?
The pick up costs include all costs incurred before the driver dispatches from the terminal and this include: The total numbers of miles are 40 while the driver waits for 12 hours. The dock workers have also worked for 8 hours which means an additional cost.
The haul line process include the time taken from dispatch at Pittsburgh to Miami and this which takes 45.8 hours while the number of miles are 1249. On the other hand the deliver process includes 2.5 hours and 15 miles.
The TL costing
Pick up
1.Deprecation tractor 12hrs @ 1.83/hr $ 21.96
trailer 12hrs@0.34/hr $ 4.08
2. Interest tractor 12hrs@2.33/hr $27.96
3.fuel 40miles@0.32/mile $12.8
4.Labour PUD 12hrs@30/hr $360
2Dock workers 8hrs@25/hr $400
5.Maintanance 40miles@0.15/mile $6
6.Insurance 40mile@0.03/mile $1.2
TOTAL PICK UP COSTS $834
Line Haul
1.Deprecition tractor 45.8hr@1.83/hr $83.81
trailer 45.8hr@0.34/hr $15.57
2.interest tractor 45.8hr@2.33/hr $106.
trailer 45.8hr@0.50/hr $22.9
3.Fuel 1249mile@0.32/mile $399.68
4.Labor 1249miles@0.42/mile $524.58
5.Maintance 1249miles@0.15/mile $187.35
6.insurance 1249miles@0.03 $37.47
Total 1377.32
Delivery
1.Depreciation tractor 2.5hr@1.83/hr $4.58
trailer 2.5hr@0.34/hr $0.85
2.Interest tractor 2.5hr@2.33/hr $5.83
trailer 2.5hr@0.50/hrs $1.25
3.fuel 15miles@0.32/mile $4.8
4.Labor 2.5hrs@22/hr $55
5. Maintenance 2.5hrs@0.15/mile $0.38
6.Insurance 2.5hrs@0.03/mile $0.076
Total Delivery Cost $76.77
2. What is the total cost of this move? Cost per cwt? Cost per revenue mile?
Total cost includes pickup, line-haul, delivery and administrative or overhead cost.
Total cost is 2288.09 +228.81= 2516.9
Cost per cwt is $6.99
Cost per revenue mile =total cost/ loaded miles therefore 2516.9/1269 which is 1.98.
4.If Hardee would put two drivers in the tractor for the line-haul move, there would
be no rest required for drivers during the line-haul move. What would happen to
total costs?
The time spent during rest is 18hour therefore, the total line haul time would be 27.8. Additional driver would only reduce the time consumed during the process but will generally lead to an increase in the total cost since it would come in as an additional form of labor. This is basically because the cost off labor is calculated in terms of the distance covered but not the time spent using the travel.
4. Assume that Hardee has no loaded backhaul to return the vehicle and driver
to Pittsburgh. How would you account for the empty backhaul costs associated
with this move? Would you include those in the head haul move? How would this
impact your pricing strategy?
One way in which Hardee may account for the empty backhaul costs is by minimizing the operational costs incurred during the process. This involves reducing the labor costs by reducing wages and number of workers. The impact of this move on the pricing strategy is that it will increase the pricing so as to cater for the costs related to empty backhaul.
Reference
N/A (2010). Costing and Pricing For Transportation. Cengage Learning: New York
