Prepare a memo for Tiger's top management that summarizes the analysis. Include comments on the extent to which your work will improve forecasts for fuel needs and truck revenue.
Tiger Transport Company is a trucking firm that moves household goods locally and across the country. Its current concern involves the price charged for moving small loads over long distances. It has rates it is happy with for full truckloads; these rates are based on the variable costs of driver, fuel, and maintenance, plus overhead and profit. When a truck is less than fully loaded, however, there is some question about the proper rate to be charged on goods needed to fill the truck. To forecast future fuel needs and prepare long-range budgets, Tiger would like to determine the cost of adding cargo to a partially filled truck.