Applied Sciences

Solution

Case 4-2 Hardee Transportation
The analysis for this case can be structured in the same manner as the truckload costing example given in the Appendix to this chapter. The analysis is as follows.
I.   Pickup: 40 miles and 4 hours
II.  Sorting: 8 hours (using 2 dock workers)
III.  Linehaul: 1249 miles and 43 hours, 48 minutes
IV.  Delivery: 15 miles and 2 hours, 30 minutes
1. What are the pickup, sort, line-haul, and delivery costs to Hardee for this move?
I.                   Pickup
1.      Depreciation: Tractor 4.0 hr.@ $2.74/hr. $10.96
Trailer 4.0 hr.@ $0.57/hr. $2.28
2.      Interest: Tractor 4.0 hr.@ $3.18/hr. $12.72
Trailer 4.0 hr.@ $0.72/hr. $2.88
3.      Fuel 4.0 miles@ $0.64/mile $2.56
4.      Labor 4.0 hr.@ $22/hr. $88.00
5.      Maintenance 40 miles@ $0.152/mile $6.08
6.      Insurance 40 miles@ $0.067/mile $2.68
7.      Billing $1.95
Total Pickup cost (Max 10 points) $130.11
II.                Sorting
1.      Labor 2 workers x 8 hr. x $22 $352.00
Total Sorting cost (Max 10 points) $352.00
III.             Linehaul
1.      Depreciation: Tractor 43.8 hr.@ $2.74/hr. $120.01
Trailer 43.8 hr.@ $0.57/hr. $24.97
2.      Interest: Tractor 43.8 hr.@ $3.18/hr. $139.28
Trailer 43.8 hr.@ $0.72/hr. $31.54
3.      Fuel 1249 miles@ $0.64/mile $799.36
4.      Labor 1249 miles@ $0.45/mile $562.05
5.      Maintenance 1249 miles@ $0.152/mile $189.85
6.      Insurance 1249 miles@ $0.067/mile $83.68
Total Linehaul cost (Max 10 points) $1,950.74
IV.             Delivery
1.      Depreciation: Tractor 2.5 hr.@ $2.74/hr. $6.85
Trailer 2.5 hr.@ $0.57/hr. $1.43
2.      Interest: Tractor 2.5 hr.@ $3.18/hr. $7.95
Trailer 2.5 hr.@ $0.72/hr. $6.85
3.      Fuel 15 miles@ $0.64/mile $9.60
4.      Labor 2.5 hr. @ $22/ hr. $55.00
5.      Maintenance 15 miles@ $0.152/mile $2.28
6.      Insurance 15 miles@ $0.067/mile $1.01
Total Delivery cost (Max 10 points) $90.96
2. What is the total cost of this move?
V.                   Total Cost
1.      Pickup, sort, linehaul, delivery $2,523.81
2.      Administrative/Overhead (10%) $252.38
Total Truckload cost (Max 10 points) $2,776.19
2b. Cost per cwt? Cost per mile
VI.               Revenue Needs
1.      Per cwt. ($2850.29/440) = $6.17 $6.31 $6.17
2.      Per revenue mile ($2776.19/1249) = $2.22 $2.22
Cost per cwt? Cost per revenue mile Max 5 points each)
3. 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 the total costs? (Max 20 points)
Question 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 headhaul move? How would this impact your pricing strategy? (Max 20 points)

Student Worksheet

Case 4-2 Hardee Transportation
The analysis for this case can be structured in the same manner as the truckload costing example given in the Appendix to this chapter. The analysis is as follows.
I.   Pickup: 40 miles and 4 hours
II.  Sorting: 8 hours (using 2 dock workers)
III.  Linehaul: 1249 miles and 43 hours, 48 minutes
IV.  Delivery: 15 miles and 2 hours, 30 minutes
1. What are the pickup, sort, line-haul, and delivery costs to Hardee for this move?
I.                   Pickup
1.      Depreciation: Tractor
Trailer
2.      Interest: Tractor
Trailer
3.      Fuel
4.      Labor
5.      Maintenance
6.      Insurance
7.      Billing
Total Pickup cost (Max 10 points) $0.00
II.                Sorting
1.      Labor
Total Sorting cost (Max 10 points) $0.00
III.             Linehaul
1.      Depreciation: Tractor
Trailer
2.      Interest: Tractor
Trailer
3.      Fuel
4.      Labor
5.      Maintenance
6.      Insurance
Total Linehaul cost (Max 10 points) $0.00
IV.             Delivery
1.      Depreciation: Tractor
Trailer
2.      Interest: Tractor
Trailer
3.      Fuel
4.      Labor
5.      Maintenance
6.      Insurance
Total Delivery cost (Max 10 points) $0.00
2. What is the total cost of this move?
V.                   Total Cost
1.      Pickup, sort, linehaul, delivery
2.      Administrative/Overhead (10%)
Total Truckload cost (Max 10 points) $0.00
2b. Cost per cwt? Cost per mile
VI.               Revenue Needs
1.      Per cwt. $0.00
2.      Per revenue mile $0.00
Cost per cwt? Cost per revenue mile Max 5 points each)
3. 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 the total costs? (Max 20 points)
Question 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 headhaul move? How would this impact your pricing strategy? (Max 20 points)

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