Eastern Talon Case Study
Eastern Talon Transport Relocation Analysis: The Concepts of Relevant Costing
Introduction
This report includes qualitative and quantitative analyses regarding the cost-benefit of the proposed move of Eastern Talon Transport’s (ETT) long-haul dispatch department inter-provincially from Laval, Quebec to Mississauga, Ontario. The qualitative section explores the reason why a reduction in operating costs is an important strategy for ETT, how the changes may effect staff productivity and what the union concerns around the proposed move would be. The quantitative section looks at how the estimated productivity gain will translate into fewer employees needed in the Mississauga office and how much this equals to in annual savings, coupled with that could be saved annually in paid rent should ETT empty one floor in Laval and sublet it. The amount of one-time investments associated with the move to Mississauga is also calculated in the quantitative analysis in order to help determine at what point these investments payoff. The recommendations section uses the results from both analyses to support the decision to move the dispatchers to the Mississauga location.
Qualitative Analysis
Considering the recent decline in cross-border heavy truck activity, increased costs of insurance and diesel fuel, is resulting in decreased profitability for most carriers, it may be in the best interests of Eastern Talon Transport to consider options in reducing operating costs within its long-haul division based in Laval. However, there are many factors to weigh before committing to such a big decision, particularly what the effects on staff will be. For example, there could be a language barrier for the dispatchers that move to Mississauga, seeing that French is likely their mother tongue, which may lead to difficulties communicating primarily in English at the Mississauga office where the native-French speaking population is considerably lower than in Laval. Also, moving the
Introduction
This report includes qualitative and quantitative analyses regarding the cost-benefit of the proposed move of Eastern Talon Transport’s (ETT) long-haul dispatch department inter-provincially from Laval, Quebec to Mississauga, Ontario. The qualitative section explores the reason why a reduction in operating costs is an important strategy for ETT, how the changes may effect staff productivity and what the union concerns around the proposed move would be. The quantitative section looks at how the estimated productivity gain will translate into fewer employees needed in the Mississauga office and how much this equals to in annual savings, coupled with that could be saved annually in paid rent should ETT empty one floor in Laval and sublet it. The amount of one-time investments associated with the move to Mississauga is also calculated in the quantitative analysis in order to help determine at what point these investments payoff. The recommendations section uses the results from both analyses to support the decision to move the dispatchers to the Mississauga location.
Qualitative Analysis
Considering the recent decline in cross-border heavy truck activity, increased costs of insurance and diesel fuel, is resulting in decreased profitability for most carriers, it may be in the best interests of Eastern Talon Transport to consider options in reducing operating costs within its long-haul division based in Laval. However, there are many factors to weigh before committing to such a big decision, particularly what the effects on staff will be. For example, there could be a language barrier for the dispatchers that move to Mississauga, seeing that French is likely their mother tongue, which may lead to difficulties communicating primarily in English at the Mississauga office where the native-French speaking population is considerably lower than in Laval. Also, moving the