of average use of bagged equipment, the latter is more efTicient in terms of 

 overall delivery costs per unit. 



However, under Hypothesis 2, each type of equipment is used to 

 feasible capacity (full 8-hour day for the operator), and the cost per ton 

 (or coincidentally, per mile) appears lo\v'er for delivering bulk feed than 

 Lagged feed. Here, the performance of the bagged delivery operation was 

 not changed much from that in Hypothesis 1 in terms of the cost per ton 

 (S2.00 vs. S2.06) ; number of bags per stop (76.6 vs. 100.0); number of 

 bags per mile (2. .58 vs. 2.50); and man minutes per bag (2.09 vs. 2.04). 

 It was not possible to do much with the bagged truck beyond the original 

 premise of 80-miles, 10-tons. But with the bulk equipment, performance 

 could be stepped-up considerably, and economies in operation resulted from 

 the substantial advantage in tonnage over the bagged equipment. 



This result concurs with conclusions reached by Rickey on the basis 

 of data for a west coast cooperative using bulk delivery for a number of 

 years.* With the bulk equipment it is possible to deliver more feed in a 

 day, and when the full advantage can be had, unit costs become lower than 

 for bagged feed delivery. 



The achievement of this result under New Hampshire conditions is 

 difficult in many areas. There is also the further problem of trying to main- 

 tain efficient routes for delivering bagged feed v/here the two systems exist 

 simultaneously. Here, if the larger customers are skimmed off to make 

 efficient bulk routes, the remaining customers must be re-grouped into effi- 

 cient bagged routes if the aggregate result is to be advantageous to the 

 company. 



To construct hypothetical average cost curves with which to illustrate 

 the effect of the introduction of bulk feed delivery into an area, all condi- 

 tions except those varying with tonnage were held constant. Territory route 

 mileage was initially assumed at 80 and it was further assumed there were 

 two routes of approximately the same length and complexity (three stops 

 and settings). Thus, tonnage was the only variable up to the points where 

 full use was being made of the equipment (in terms of feasible tonnage and 

 full utilization of the drivers' time). As in the preceding examples, calcu- 

 lations were based on one man per truck. When the points of full use were 

 reached, it was assumed that a small truck would be added to carry bagged 

 feed on short local routes, in lieu of adding another piece of large equip- 

 ment (which would have abruptly jumped the average cost curves). The 

 costs assumed for the small truck are presented in Tables 21 and 22. 



The route time formula was combined with loading time and office time 

 to compute the time component of total costs. For purposes of calculating 

 loading time, an average loading time of .12 man minutes per 100 pounds 

 was used for bulk feed. For bagged feed, the following estimates of loading 

 time in man minutes per 100 pounds, as derived from Table 12 were used; 

 up to 50 bags, .47; 50-90, .55; 90-130, .63; over 130, .71. These figures are 

 averages from the 1-man data classified by numbers of 100-pound bags and 

 by stops (in this example, 3). 



From the average cost curves in Figure 10, the importance of securing 

 maximum utilization of bulk equipment is apparent. Only when this is done 

 does the average cost per ton for delivery fall below that for bagged feed 



* Rickey, L. F., Delivering Feed in Bulk, Farm Credit Administration, U.S.D.A., 

 Circ. C-143, January, 1952, p. 19. 



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