Posted: April 4th, 2022

Management of a soft-drink bottling company

Management of a soft-drink bottling company wants to develop a method for allocating delivery costs to customers. Although one cost clearly relates to travel time within a particular route, another cost variable reflects the time required to unload the
cases of soft drink at the delivery point. A sample of 20 deliveries within a territory was selected. The delivery times (in minutes) and the number of cases delivered were recorded in the file WK3_X2.xls. An analyst computes the delivery time per case delivered
and averages these to get 0.33 minutes. Using this he gives an estimated delivery time of 50 minutes for 150 cases to be delivered. Is this a reasonable delivery time? Explain why or why not. Looking at the data in the file, can you give a better estimate?
Make sure that you justify your estimate.

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