Cost Comparison of Five Institutional Food Delivery Systems

James J. Karitas

No 313408, Marketing Research Reports from United States Department of Agriculture, Agricultural Marketing Service, Transportation and Marketing Program

Abstract: In this study, costs are compared for several methods of delivering combined loads of frozen foods and groceries from local warehouses to food service establishments. Five basic systems were studied and costs were developed for a fleet of 12 vehicles with 18-foot truck bodies. Costs were based on delivering 3,900 cases per peak day to 300 customers, with an average order of 13 cases. Frozen foods ranged from 20 to 50 percent of the truckload and groceries and some nonfrozen perishables comprised the remainder. The basic delivery systems were (1) noninsulated, nonrefrigerated trucks with 17.5-cubic foot insulated containers, (2) noninsulated, nonrefrigerated trucks with 50-cubic foot insulated containers, (3) partly insulated, partly refrigerated trucks with fixed bulkhead, (4) fully insulated, 50-percent refrigerated trucks with movable bulkhead, and (5) fully insulated, fully refrigerated trucks with insulating blankets. Several methods were compared based on annual ownership, operating, and labor costs. The findings were as follows: At the 20-percent level of frozen foods, using noninsulated, nonrefrigerated trucks with 50-cubic foot insulated containers resulted in the lowest cost—$22,299 lower than the highest cost method. At the 30-percent level, this method also produced the lowest cost—$26,864 lower than the highest cost method. At the 40-percent level, using partly insulated, partly refrigerated trucks with fixed bulkhead resulted in the lowest cost. At the 40- and 50-percent levels, respective costs were $11,981 and $7,273 lower than the highest cost method. At all levels, using fully insulated, fully refrigerated single-compartment trucks resulted in the highest cost. Differences between the higher cost of movable over fixed bulkheads were $7,328 at the 30-percent, $5,183 at the 40-percent, and $2,472 at the 50-percent levels. Because of this nominal difference and the obvious flexibility of movable bulkheads, an operator may decide to use the movable bulkhead. Regardless of the level of frozen foods, labor costs between the methods only varied about $7,363 annually, whereas ownership and operating costs combined varied about $28,475.

Keywords: Labor and Human Capital; Marketing; Production Economics; Research and Development/Tech Change/Emerging Technologies (search for similar items in EconPapers)
Pages: 42
Date: 1978-10
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:uamsmr:313408

DOI: 10.22004/ag.econ.313408

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