| 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) |
