Question

Please help me answer all 3 questions in this case. The numbers and questions asked, in this case, is different than the other cases similar to it, so please don't copy and past other answers from the same case. Also if you could please provide steps to how you're getting the answers, if possible show it in excel with formulas, please.

CASE 4-2 Hardee Transportation (B) One of Jim O'Brien's customers has presented him with an opportunity for a signifi- cant amount of freight moving into a new market for Hardee. Hardee is a truckload carrier primarily moving freight in the East/West market in the United States. Although it has some movements in and out of Canada and Mexico, Hardee has focused on moving freight in eastward and westward directions. Hardee has dispatch centers located throughout the United States which have some dock capacity The new move would be between Pittsburgh and Miami. Hardee has avoided this market because of the lack of backhaul opportunities that exist outbound from Florida. However, this new move offers a significant increase in volume for Hardee. A compli- cating factor in this move is the request that Hardee perform sorting and segregation at its dispatch centers. Each shipment will consist of straight (one product) pallet loads of various types of consumer goods freight destined for a retailer's distribution center in Miami. Sorting and segregation at Hardee's locations would consist of breaking the pallets and sorting the freight by the retailer's store locations, then repalletizing into rainbow (mixed products) pallets for each store. Hardee has never experienced this type of request before. Jim knows that he needs to put some type of costs to this move to make sure that the moves are profitable. Because of the large volume involved, not covering Hardee's costs in pricing could result in large losses for Hardee. The relevant information for costing this move is as follows: Equipment Cost Data Equipment Purchase Price 1. Line-haul tractors $80,000 2, Line-haul trailers $24,000 L. Tractors 5-year straight line Trailers- 8-year straight line Interest 1. Tractors-10 percent APR for 5 years 2. Trailers 10 percent APR for 8 years Fuel

Answer the following questions using the information provided above. Show all of your calculations in an Excel file. Make sure that your responses to the questions below are clearly identified within the Excel file:

1. What is the total cost of this move? (Make sure to consider all costs, including, but not necessarily limited to: labor, fuel, maintenance, insurance, dock charges, vehicle financing.

2. How would the total cost change if the truck was required to return to Pittsburgh without a load (i.e. deadhead)?

3. What could Hardee do to try and reduce the cost and time required for this move?

Answer 1

	Equipment	Price	Depn	Interest	Time	Fuel
	Tractors	$     80,000.00	$                   16,000.00	10%	5	$    13.65
	Trailers	$     24,000.00	$                     3,000.00	10%	8
		Labor
	Line haul	0.42	per mile
	PUD	30	per hour
	Dock	25	per hour
	CWT	40000
	Insurance	0.05	per mile
	Maintenance cost	0.15	per mile
	Billing cost	5	per bill
	Utilization per day	16
	Cost of administration	8%	of total cost of move
	Dock facility cost	15	per hour
	Average speed	45
	Process	Time range	Time(hrs)	Resources	Distance	Cost
	PUD	8.30 to 9 am	0.5	PUD driver	20	15
	Loaded	9 to 12pm	3	PUD driver		90
	Comes back	12 to 12.30	0.5	PUD driver	20	15
	Sort process	12.30 to 8.30	8	2 dock worker		200
	Line haul		48	1 driver	1264	20.16
	Unloading		2			0.84
	Cost
	Initial cost	$ 104,000.00
	Amount borrowed	$ 104,000.00		1)	Pick up cost	Line haul	Delivery
	Interest	$     10,400.00
	Fuel cost	$     17,799.60			$       273.00	$ 273.00	$ 17,253.60
	Cost of labor	341			120	221
	Indurance cost	65.2					65.2
	Maintenance cost	195.6			$       393.00	$ 494.00	$ 17,318.80
	Billing cost	5
	Total cost	$     28,806.40
	Admin cost	$       2,304.51
	Dock facility cost	75
	Net cost	$     31,185.91
2)	Total cost	$     31,185.91
	Cost per cwt	$              0.78
	Cost per mile	$            23.92
3)	For empty backhaul, the cost would be same since the vehicle is still running and the driver is also being utilized.
	This would therefore have no impact on the pricing strategy