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Management matters

11th October 1968
Page 65
Page 65, 11th October 1968 — Management matters
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Which of the following most accurately describes the problem?

Keywords : Electric Vehicles

The cost of better braking

THE interim Braking Standards for existing vehicles came into force on January 1 1968. to be replaced by higher standards in the early 1970s. Much confusion arose when these proposals were first published. It was known that a large number of the existing commercial vehicles, given adequate maintenance, would pass these standards. The problem was to quantify the number of failures and to estimate the cost of converting them to meet the 1968 regulations.

Robert Harrison, of the Graduate Centre for Management Studies, Birmingham. prepared an estimate for the Ministry of Transport based on information supplied by transport operators selected at random in the spring and summer of 1967. It is possible that some operators decisions may have been altered before January 1 1968 but this is most likely to have occurred in small firms where such flexibility is possible.

A relatively simple method was used to obtain the estimate. It was known that brake conversion cost varied with the size of the vehicle. Given the constraints of time and money it was decided that the most accurate way of incorporating this variation was to divide the fleets of the sampled firms into 2, 3, 4 and 4 -i axle groups. In a previous section of the research a forecast of national xle groups had been made and these could

e used to arrive at the national figures. It as thus possible to calculate the percentage

f affected vehicles in the sample and transfer hese group figures to the national statistics.

• n estimate could then be made of the numer of affected vehicles in each axle sector of he total (UK) commercial vehicle fleet over Ocwt.

Using information obtained from the perators the average cost of converting each type of vehicle was calculated. Simple multiplication gave the total for each group and therefore the overall cost. Not surprisingly. it was found that all the sample vehicles with more than four axles met the 1968 regulations. Most such vehicles had been built since the 1964 changes in the Construction and Use Regulations which encouraged the use of such vehicles.

The results of the braking research are shown below.

In other words, the estimated cost to the industry of 1968 Braking Standards is . around L34m. Allowing for some altered management decisions since the survey was made the conversion cost is estimated by Mr. Harrison to lie between a low figure of £3m and a high figure of £4m. The L31-nri estimate covers modifications directly attributable to the Braking Regulations but it would obviously be unfair to apportion to the higher braking standards the cost of scrapped vehicles. Other factors, such as plating, advances in vehicle specifications and tax allowances may be involved. In such cases it would be clearly wrong to allocate cost to any one particular factor.

Early cost estimates of the braking proposals were very high in comparison with the inin suggested. This may have resulted from general technical confusion and managerial pessimism. The industry faced a number of rumours as to the Ministry's intentions in the regulations—air line conversions for automatic coupling artics. and so on. The majority of rumours were unfounded but after consideration many managers realized that although the regulations came into force on January I 1968 it was not possible to enforce this legislation adequately until the selected testing stations were opened—much later in the year. Vehicles could therefore be replaced quite leisurely, taking advantage of what was virtually a year's delay. Hence pessimism was often replaced with silence.

Who pays?

The earlier estimates indicated that rates might be affected by braking modification costs. Operators were asked how they would meet the additional costs incurred. Their answers fall into two categories and appear to reject the earlier expectations. Sixty-nine per cent of those questioned said they would absorb the braking modification costs in general overheads; 31 per cent would meet it by special budget.

The two group answers are closely related. The first group placed the costs into their normal overhead account, presumably under the maintenance section. The second group had estimated the cost components and allocated a special sum of money to cover the total figure. None of the firms answered the question by stating that rates would be affected.

Two factors stand out from an examina


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