1. S
Increased Efficiency
Darin Finley
GEB 3213-1998
06-11-14

2. Overview
S Fuel costs are on the rise
S These increase in price of diesel is taking away from
profit sharing for employees
S Price per case delivered could be decreased to
compensate for increased fuel expenses
S Routes could even be cut in order to save money from
fuel expenses

3. Introduction
S Rising fuel costs are putting a burden on the company
S Older inefficient trucks are showing signs of wear and
tear
S If expenses continue to rise, it could negatively effect
Great Bay and its employees
S There are few opportunities that can be looked into

4. The Opportunity
S The International trucks average about 4 miles per gallon
S Each truck averages 375 miles per week
S There are 45 active trucks used daily in the trade
S This equates to 16,875 miles driven and 4,219 gallons of diesel
fuel used each week
S National average of diesel fuel today(June 22nd) is $3.92 (Source:
AAA)
S Doing the math, this comes to about $16,538.48 per week in fuel

5. The Opportunity cont.
S The new Class 8 Peterbilt 587 costs about $150,000
S Gas mileage is rated at 9.9 miles per gallon
S This equates to less than half the fuel consumption as
the International trucks
S Fuel savings would come to about $9854.88 per week
S That’s over $512,000.00 per year in savings!

6. Fuel Price History
Source: www.overdriveonline.com

7. The Current Situation
S Diesel fuel has been rising over the past year
S If this continues, the added expense could impact the
bottom line for the company and employees
S A plan of action needs to be taken in order to alleviate
this added expense off employees wages

8. Key Success factors
S Great Bay needs to be financially ready to invest into new
vehicles
S If cost of diesel continues to steadily rise, this would provide a
need for change
S Older International trucks begin to break down, which would
require replacing
S The drivers that deliver our product start to lose money out of
their paychecks

9. Analysis of Alternative
S If we retain the current trucks, fuel costs could continue
to rise, and financial cutbacks would take place, such as:
S Lowering driver salary
S Cutting some routes and laying off some employees
S Let the company take the hit, which would effect the
companies bottom line

10. Strategic Option
S Begin by slowly purchasing a few trucks at a time
S After a few months of visible savings on fuel, use the
accumulated savings to invest into more trucks
S Continue this process until the entire fleet is switched
over

11. Benefits
Old trucks
S Already paid for
S Have plenty of life left in them
S No down time in between
transition phase
New trucks
S Decreased fuel costs
S Good investment
S Show the community that we
are trying to be more green

12. Risks
Old trucks
S Fuel expenses could hurt the
company
S Fuel expenses could hurt the
drivers salary
S Older trucks that have more
mileage are more inclined to
break down
New trucks
S Large investment could put the
company in financial strains for
a while
S If the trucks don’t reach the
predicted numbers, investment
could cause financial loss

13. Final Recommendation
S After careful consideration, investing in the Class 8
Peterbilt trucks would be a good financial investment for
the company
S The savings per year on fuel would pay for the Class 8
Peterbuilt trucks over a short period of time
S Newer trucks will eventually need to be purchased
S These newer trucks will last for many years to come

14. Highlighted References
S Agar, B. J., Baetz, B. W., & Wilson, B. G. (2007). Fuel Consumption, Emissions Estimation, and Emissions Cost Estimates
Using Global Positioning Data. Journal Of The Air & Waste Management Association (Air & Waste Management Association),
57(3), 348-354.
S De Borger, B., & Mulalic, I. (2012). The determinants of fuel use in the trucking industry—volume, fleet characteristics and the
rebound effect. Transport Policy, 24284-295. doi:10.1016/j.tranpol.2012.08.011
S McKittrick, E. (2014). A Fossil Fuel Economy in a Climate Change Vulnerable State. Environment, 56(3), 25-35.
doi:10.1080/00139157.2014.901838
S Peña Puerto', J., & Mendoza, M. (2008). Sustitución de fuel oil por gas natural en ANDERCOL Medellín. (Spanish). Producción
Más Limpia, 3(1), 61-76.
S Sarewitz, D., & Pielke Jr., R. (2013). Learning to Live With Fossil Fuels. Atlantic, 311(4), 59.
S Staff, O. (2013, October 1) [illustration]. Diesel price continues to fall nationally, down 16 cents year-over-year. Overdrive
Magazine. Retrieved June 26, 2014, from http://www.overdriveonline.com/diesel-price-continues-to-fall-nationally-down-16-
cents-year-over-year/
S Tannert, C. (2013, April 4). Why a 10 MPG Peterbilt semi is a really big deal. Road & Track. Retrieved June 25, 2014, from
http://www.roadandtrack.com/go/news/news-peterbilt-cummins-tractor-trailer-fuel-economy