Analysis of Friendly Courier's Truck Maintenance Costs

OPERATIONS MANAGEMENT
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Introduction
The case is related to Friendly Courier whose owner Joe is facing the issue of high
maintenance costs related to ageing fleets of trucks. In this regards, there are three objectives
of the given case analysis.
Objective 1: Analyse the underlying relationship between truck mileage and total costs of
repair (suspension + braking related)
Objective 2: Recommend if the swapping of fleets between the two teams would be useful in
addressing the current issue
Objective 3: Recommend if the company should avail; life time warranty plan being offered
at $ 4,500 per year per truck.
Analysis
Relationship between mileage and repair costs
Correlation analysis has been done for the entire fleet of trucks (both teams included) to
highlight the relationship between the given two variables. The relevant scatterplot is
indicated as follows.
It is fair to draw the conclusion that a positive and strong linear relationship is apparent
between the average mileage travelled and the total repair costs for the company’s fleet (Hair,

Wolfinbarger, Money, Samouel & Page, 2015). As a result, it would be fair to conclude that
higher mileage would most likely lead to increased repair costs.
Also, correlation analysis has been performed between the mileage travelled and the brakes
repair cost. Taking into consideration, the complete fleet from both regions, the following
scatter plot is derived.
The above plot highlights that the linear relationship between the two variables is strong and
positive. However, there is a decline in the correlation coefficient in this case. Besides, based
on the equation of the best fit line, it is appropriate to conclude that on average 1 unit increase
in truck mileage would cause the brake related repair costs to rise by 9 cents (Hillier, 2016).
Also, correlation analysis has been performed between the mileage travelled and the
suspension repair cost. Taking into consideration, the complete fleet from both regions, the
following scatter plot is derived.