(2) If each type of equipment is fully used under similar conditions, 

 which is cheaper — distribution of bagged feed or bulk feed? 



Table 18. Comparison of the Efficiency of Three Selected Bagged Feed Routes 



Roiitf A: Route B: Route C: 



Item Low Efficiency Medium Efficiency High Efficiency 



Quantity (100-lb bags) 



Route miles 



No. of stops 



Elapsed time (man minutes) 



Bags per stop 



Bags per mile 



Man minutes per bag 



Route costs: 

 Fixed^ 

 Labor^ 

 Other variable^ 



Total 



Cost per 100 lbs. 

 Cost per mile 

 Cost per ton mile 

 Cost per ton 



^ Proportional to time. 

 ^ Proportional to mileage. 



The assumptions made under Hypothesis 1 were as follows: 



(1) Two loads per day for each truck; payload of 5 tons. 



(2) One stop and one setting per load. 



(3) Each route 40 miles round trip. 



(4) Routes efficient from time aspects. 



(5) One man used in loading and unloading. 



The assumptions made under Hypothesis 2 were as follows: 



(1) As many routes as practicable to utilize an 8 hour day for 1 man. 

 For bagged feed this was calculated to be 2 loads of 5 tons 

 each over 40 mile routes and 1 load of 1^/2 tons over a 9 mile 

 route. For bulk feed, two loads of 5 tons each over 40 mile routes 

 and 1 load of 7 tons over a 49 mile route were used. 



(2) One stop and one setting per load. 



(3) Routes efficient from time aspects. 



(4) One man used in loading and unloading. 



One of the primary problems in building efficient bulk delivery routes 

 is the higher daily depreciation costs on equipment. These costs for bulk 

 equipment may be two to three times those for bagged delivery equipment. 

 Hence, bulk equipment must be used extensively before route time savings 

 are sufficient to offset the higher depreciation costs. Depreciation costs for 

 bagged and bulk delivery trucks in use by one firm are presented in Table 19. 



Under Hypothesis 1, the operating costs of a 3-ton bagged delivery 

 truck, other than labor, were assumed to equal 13 cents per mile. Gasoline 

 consumption was established at 7 miles per gallon for the bagged truck 



39 



