Your company currently hauls 1 load a week from Chicago to Indianapolis and from Columbus back to
Question:
Your company currently hauls 1 load a week from Chicago to Indianapolis and from Columbus back to Chicago. To balance the flow of trucks in and out of markets, you reposition trucks empty from Indianapolis to Columbus after delivering a load from Chicago. Distances are seen below. Chicago to Indy is 184 mi, Indy to Columbus is 175 mi and Columbus to Chicago is 357 miles.
Loaded miles cost $1.30 per mile and empty miles cost $1.15 (both excluding fuel), and fuel costs $0.40 per mile loaded and $0.30 per mile empty. You currently have a linehaul rate (rpm) from Chicago to Indianapolis of $1.65 plus a fuel surcharge of $0.40 per mile and a rpm from Columbus to Chicago of $1.60 plus a fuel surcharge of $0.40 per mile.
What is the profit margin on this business? Calculate revenue and costs on a per-week basis (single tour).
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling