I need the Case Study Questions answered in the form of a written analyses for each question. No more than 2 pages- double spaced with Excel spreadsheet to support answers.

Please refrain from "fluff" please and apply logical, solid analysis. Feel free to use graphics, charts, and any pictures that may enhance or support your analysis. Remember to cite sources as appropriate for any outside material presented. Use APA style for your citations.

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 ¼ $80,000
2. Line-haul trailers ¼ $24,000
Depreciation
1. Tractors ¼ 5-year straight line
2. Trailers ¼ 8-year straight line
Interest
1. Tractors ¼ 10 percent APR for 5 years
2. Trailers ¼ 10 percent APR for 8 years
Fuel
1. $2.10 per gallon for diesel
2. Line-haul tractors ¼ 6.5 miles per gallon
Labor
1. Line-haul drivers ¼ $0.42 per mile
2. Pick-up and delivery (PUD) drivers ¼ $30 (fully loaded) per hour
3. Dock workers ¼ $25 (fully loaded) per hour
Miscellaneous
1. Insurance cost ¼ $0.05 per mile
2. Maintenance cost ¼ $0.15 per mile
3. Billing cost ¼ $5.00 per freight bill
4. Tractors and trailers are available for use 20 hours per day (80 percent uptime),
365 days per year
5. Administrative/overhead cost ¼ 8 percent of total cost of move
6. Dock facility cost ¼ $15 per hour
7. Line-haul vehicle averages 45 mph between origin and destination.
Route and Time of Move
The shipment (40,000 pounds) originates at a customer location in Pittsburgh, located
20 miles from Hardee’s dispatch center. A PUD driver is dispatched from the Hardee
location at 8:30 a.m. on January 12, 2010, and arrives at destination at 9:00 a.m.
the same day. The shipment is loaded from 9:00 a.m. to 12:00 p.m. The PUD driver
departs the customer location at 12:00 p.m. and arrives back at the Hardee dispatch
center at 12:30 p.m.
The sort process starts at 12:30 p.m. and ends at 8:30 p.m. on January 12. It requires
unloading the trailer, sorting, and repalletizing the load. This operation requires two
dock workers, each working the same trailer for 8 hours in the dispatch center.
The line-haul portion begins with the vehicle being dispatched from the Pittsburgh
location at 8:30 p.m. on January 12 and traveling to Charlotte, North Carolina, a dis-
tance of 481 miles, and arriving at Charlotte at 7:12 a.m. on January 13. The driver
rests from 7:12 a.m. until 3:12 p.m. The trip continues with the vehicle departing
Charlotte at 3:12 p.m. on January 13 and traveling to Jacksonville, Florida, a distance of
399 miles, arriving at Jacksonville at 12:06 a.m. on January 14. The driver rests from
12:06 a.m. until 10:06 a.m. The line-haul portion concludes with the vehicle departing
Jacksonville at 10:06 a.m. and traveling to the customer’s location in Miami, a distance
of 369 miles, and arriving at the distribution center at 6:18 p.m. on January 14.
The line-haul driver stays with the vehicle while it is being unloaded (2 hours un-
load time). The driver then deadheads at 8:18 p.m. from the customer’s distribution
center and arrives at a Hardee dispatch center located in Miami at 8:48 p.m., a distance
of 15 miles from the distribution center.


CASE QUESTION
1. What are the pick-up, sort, line-haul, and delivery costs to Hardee for this move?


2. What is the total cost of this move? Cost per cwt? Cost per revenue mile?

3. If Hardee would put two drivers in the tractor for the line-haul move, there would be no rest required for the drivers during the line-haul move. What would happen to total cost?

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?

Math Expert

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Status NEW Posted 01 Oct 2017 04:10 PM My Price 7.00

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file 1506877146-Hardee Transportation B case.docx preview (462 words )

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