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n When costing the operation of a trac

12th May 1967, Page 197
12th May 1967
Page 197
Page 197, 12th May 1967 — n When costing the operation of a trac
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Which of the following most accurately describes the problem?

tive unit with five semi-trailers what is the correct method of depreciating the trailers and dealing with trailer tyre costs? Also when submitting a quotation what provision is made regarding the additional trailers?

A If the tractive unit averaged, say, 40,000 miles a year and the five semi-trailers were equally worked, then, for the purpose of

costing, it would be assumed that each trailer averaged 8,000 miles a year. In practice, therefore, whether one costed on the basis of five trailers averaging 8,000 miles or one trailer, like the tractive unit, averaging 40,000 miles, then the result would be similar except for the relatively minor additional interest on the extra capital outlay on the spare trailers and possibly routine weekly washing and servicing.

However, in terms of time each trailer would in theory last five times as long as the tractive unit. But an operator might, in practice, have to replace his trailers sooner than on a purely mileage basis because of obsolescence. In other operational circumstances the combined mileages of the trailers could substantially exceed the mileage life of one tractive unit. Similar considerations would apply in calculating trailer tyre costs.

Regarding charging for individual jobs where one tractive unit and several semi trailers are operated, the method would depend on individual circumstances. If the haulier himself has provided additional semi trailers for his own convenience to facilitate loading and unloading then he would presumably get his reward by reducing terminal time and so increasing overall productivity.

If, however, additional trailers had been requested by the customer regardless of whether a greater tonnage was thereby moved then the haulier would be justified in including in his charge the cost involved in the outlay on the additional trailers.