CASE $4-2$Hardee TransportationOne of Jim OBriens customers has presented him with an opportunity for a significantamount of freight moving into a new market for Hardee. Hardee is a truckload carrierprimarily moving freight in the East$/$West market in the United States. Although it hassome movements in and out of Canada and Mexico, Hardee has focused on moving freightin eastward and westward directions. Hardee has dispatch centers located throughout theUnited States, which have some dock capacity.The new move would be between Pittsburgh and Miami. Hardee has avoided this marketbecause of the lack of backhaul opportunities that exist outbound from Florida. However,this new move offers a significant increase in volume for Hardee. A complicating factor inthis move is the request that Hardee perform sorting and segregation at its dispatch centers.Each shipment will consist of straight $($one product$)$ pallet loads of various types ofconsumer goods freight destined for a retailers distribution center in Miami. Sorting andsegregation at Hardees locations would consist of breaking the pallets and sorting the freightby the retailers store locations, then repalletizing into rainbow $($mixed products$)$ pallets foreach store.Hardee has never experienced this type of request before. Jim knows that he needs toput some type of costs to this move to make sure that the moves are profitable. Because ofthe large volume involved, not covering Hardees costs in pricing could result in large lossesfor Hardee. The relevant information for costing this move is as follows:Equipment Cost DataEquipment Purchase Price$1.$ Line$-$haul tractors $5$ $$120,0002.$ Line$-$haul trailers $5$ $$40,000$Depreciation$1.$ Tractors $55-$year straight line$2.$ Trailers $58-$year straight lineInterest$1.$ Tractors $56$ percent APR for $5$ years$2.$ Trailers $56$ percent APR for $8$ yearsFuel$1.$ $$3\mathrm{.}83$ per gallon for diesel$2.$ Line$-$haul tractors $56\mathrm{.}0$ miles per gallonLabor$1.$ Line$-$haul drivers $5$ $$0\mathrm{.}45$ per mile$2.$ Pickup and delivery $($PUD$)$ drivers $5$ $$30($fully loaded$)$ per hour$3.$ Dock workers $5$ $$25($fully loaded$)$ per hourMiscellaneous$1.$ Insurance cost $5$ $$0\mathrm{.}067$ per mile$2.$ Maintenance cost $5$ $$0\mathrm{.}152$ per mile$3.$ Billing cost $5$ $$1\mathrm{.}95$ per freight bill$4.$ Tractors and trailers are available for use $24$ hours per day, $365$ days per year$5.$ Administrative overhead cost $510$ percent of total cost of move$6.$ Dock facility cost $5$ $$15$ per hour$7.$ Line$-$haul vehicle averages $45$ mph between origin and destinationRoute and Time of MoveThe shipment $(45,000$ pounds$)$ originates at a customer location in Pittsburgh, located $20$miles from Hardees dispatch center. A PUD driver is dispatched from the Hardee locationat $8$:$30$ a$.$m$.$ on January $12,2015,$ and arrives at the destination at $9$:$00$ a$.$m$.$ the same day.The shipment is loaded from $9$:$00$ a$.$m$.$ to $12$:$00$ p$.$m$.$ The PUD driver departs the customerlocation at $12$:$00$ p$.$m$.$ and arrives back at the Hardee dispatch center at $12$:$30$ p$.$m$.$The sort process starts at $12$:$30$ p$.$m$.$ and ends at $8$:$30$ p$.$m$.$ on January $12.$ It requiresunloading the trailer, sorting, and repalletizing the load. This operation requires two dockworkers, each working the same trailer for $8$ hours in the dispatch center.The line$-$haul portion begins with the vehicle being dispatched from the Pittsburghlocation at $8$:$30$ p$.$m$.$ on January $12$ and traveling to Charlotte, North Carolina, a distanceof $481$ miles, and arriving at Charlotte at $7$:$12$ a$.$m$.$ on January $13.$ The driver rests from$7$:$12$ a$.$m$.$ until $3$:$12$ p$.$m$.$ The trip continues with the vehicle departing Charlotte at $3$:$12$p$.$m$.$ on January $13$ and traveling to Jacksonville, Florida, a distance of $399$ miles, arriving atJacksonville at $12$:$06$ a$.$m$.$ on January $14.$ The driver rests from $12$:$06$ a$.$m$.$ until $10$:$06$ a$.$m$.$The line$-$haul portion concludes with the vehicle departing Jacksonville at $10$:$06$ a$.$m$.$ andtraveling to the customers location in Miami, a distance of $369$ miles, and arriving at thedistribution center at $6$:$18$ p$.$m$.$ on January $14.$The line$-$haul driver stays with the vehicle while it is being unloaded $(2$ hours unloadtime$).$ The driver then deadheads at $8$:$18$ p$.$m$.$ from the customers distribution center andarrives at a Hardee dispatch center located in Miami at $8$:$48$ p$.$m$.,$ a distance of $15$ miles fromthe distribution center.CASE QUESTIONS$1.$ What are the pickup, sort, line$-$haul, and delivery costs to Hardee for this mov What is the total cost of this move? Cost per cwt$?$ Cost per revenue mile?$3.$ If Hardee would put two drivers in the tractor for the line$-$haul move, there would be norest required for drivers during the line$-$haul move. What would happen to total costs?$4.$ Assume that Hardee has no loaded backhaul to return the vehicle and driver toPittsburgh.How would you account for the empty backhaul costs associated with thismove? Would you include those in the headhaul move? How would this impact yourpricing strategy?