The costs to Hardee for this move

Introduction

The costs to Hardee for this move can be estimated to be as follows;

A gallon of diesel costs $2.10 which is used as fuel for tractors. A linehaul tractor a gallon of fuel for 1/4 6.5 miles covered. The total number of miles covered in the whole journey from the departure office to the final destination in miles is 20+20+481+399+369+15=1304 miles.

The total number of gallons of fuel consumed is equal to 1/4(1304/6.5)= ¼(200.615) gallons.

A gallon of fuel costs $2.10 thus the total cost of fuel over 1304 miles is equal to the total number of gallons times the cost per gallon.

=1/4(200.615)×$2.10

Total Cost of drivers is given as ¼$0.42×1304= ¼$3104.76

Maintenance per mile =1/4$(1304/0.15)

Linehaul tractor costs ¼$80,000

Total line haul cost is =1/4$80000+1/4$8693.33+1/4$3104.76 +1/4$845

=1/4$(80000+869.33+3104+845)

¼$84818.33

Pick up cost will be equal to the cost of two docks plus the cost of (PUD) drivers per hour total cost for two docks per hour=2×1/4$25 =1/4$(50). Total cost for loading in 3 hours each =1/4$(300)

The cost of drivers for three hours pickup is equalto1/4$30×3= ¼$ 90.

Total pick up cost=1/4$ (300+90) =1/4$(390)

Sorting cost is equal to the total time taken to sort times the total cost of docks. Time is taken for sorting = 8hrs. Each dock is paid ¼$25 per hour so for 8 hours= ¼$25×8 =1/4$ 200

There are two docks involved in sorting thus total cost = ¼$400.

The total cost for the whole move is given by putting together all the costs that were incurred individually along with the move.

The total cost is the sum of all costs.

 

 

Insurance cost per mile =1/4$0.05

Total number of miles covered =1304, therefore, the total cost is ¼$(1304×0.05)

Billing cost per fright bill =1/4$5.00

Dock facility cost=1/4$ 15per hour.

Summation of all costs is = 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)

¼$86385.33

The total cost will increase because the additional driver will cost the same amount as the one driver plus and they will be doing the same job in the same tractor but at different times. The line haul expanse will shoot up and as a result, the total cost will increase. 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 still costs in this move although smaller 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 eat much into the profit of the business. Because the vehicles must use fuel drivers must be paid and the taxes and the costs involved in using the public roads must also be paid. Without properly structuring this cost of transport a company may find that it is running on debts or loses. For me, I could devise a method whereby the return journeys also involves some business activity so that we generate some profits 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).

 

Reference

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? Pg 528.

 

 


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