THE COMPARISON OF MODEL OF COST ANALYSIS IN THE TRANSPORTATION PROCESS. A CASE STUDY: PATTARAPOL TRANSPORT COMPANY LIMITED

Abstract

This research aims to (1) examine the cost data associated with investing in the purchase of 10-wheel trucks and trailers compared to outsourcing transport services from external contractors, (2) assess the feasibility of investing in 10-wheel trucks and trailers to replace the use of external transport contractors or partner vehicles, and (3) provide fundamental information on the factors involved in cost calculations for decision-making regarding truck purchases. The case study company, which has been operating in the logistics sector for over 10 years, seeks diverse investment strategies to ensure operational efficiency and continuity, given its 3-year contractual agreements that may affect efficiency and confidence in future bidding opportunities. The study designs six decision-making scenarios, as follows 1) Investing in the purchase of seven new 10-wheel trucks 2) Investing in the purchase of seven used trucks 3) Outsourcing transportation services for seven trucks 4) Combining the purchase of four new trucks with outsourcing three external trucks 5) Combining the purchase of four used trucks with outsourcing three external trucks 6) Using the company’s existing trucks while outsourcing transportation only when internal fleet capacity is insufficient. The analysis encompasses fixed costs, variable costs, depreciation, maintenance expenses, and long-term investment returns. The results reveal that the most suitable approach is to invest in the purchase of four used 10-wheel trucks in approximately 80% condition, supplemented by the company’s existing three trucks. This approach effectively reduces operational costs and enhances resource management efficiency, enabling the company to shift from an average monthly loss of 67,976 THB to an average monthly profit of 184,024 THB. This represents an annual return on investment of 15.3%. Additionally, this strategy increases flexibility in resource management and provides a competitive advantage in the long-term business landscape.