same distance per day, to assemble 

 86 cwt. of milk, as did the can truck. 

 This means that the dairy farms 

 served by these two tank trucks were 

 farther apart than those served by 

 the can truck. In that sense, the can 

 truck had a more favorable route than 

 did these particular tank trucks. 

 Hence, it would not be valid to make 

 a direct comparison on the assump- 

 tion that the operating conditions 

 were alike for all three trucks. The 

 only valid comparison would be to 

 say that, by using every-other-day 

 pick-up, these two tank trucks had 

 costs per cwt. almost as low as did 

 this can truck, despite the relatively 

 unfavorable routes of the tank trucks. 

 The can truck, of course, used 

 every-day pick-up. 



6. The Break-even Point 



Most truckers will want to know 

 the minimum capacity at which they 

 can operate at given rates. This par- 

 ticular pay load will depend on the 

 cost of running the truck and the 

 rates which can be charged for the 

 job. Therefore, each truck and each 



route will have conditions peculiar 

 to it which will govern the break- 

 even point. 



The method of computing the 

 break-even point is illustrated in 

 Table 38. There, the tank trucks and 

 mileages are those covered by Table 

 36, and • simply as one example 

 out of many possible rates — it is 

 assumed that the rate which the 

 trucker is considering is $0.25 per 

 cwt. In order to break-even, the op- 

 erator of Truck No. 1 would need 

 to have a daily pay-load averaging 

 79 percent of the truck's capacity. 

 The operator of Truck No. 3 would 

 need to have a daily pay-load aver- 

 aging 137 percent of the truck's ca- 

 pacity which would be possible 

 if the vehicle served two routes per 

 day. 



If the trucker does attemot to oper- 

 ate at any given rate, such as $0.25 

 per cwt., and finds that he consistent- 

 ly has a pay-load below his break- 

 even point (computed in Table 38), 

 he then needs to serve more pro- 

 ducers or to raise his rates — unless 

 the dealer will make up the trucker's 

 deficit. 



Table 38. Minimum Capacity Use of Tank Truck to Break-Even 

 at a Rate of $0.25 per Cwt., with Various Trucks and Mileages 



1 Includes both fixed and variable expenses. See Table 36, on which this table is based. 



2 Two routes to total 100 miles. 



42 



