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after working for 30 years, Ramjee somjee dutt option for VRS and started a courier company and did very well in the first four years. he was looking for expansion of his business and decided to venture into Road transportation business between chennai and mumbai and mumbai and delhi as he felt that he could do well on this line. however before taking final decision he hires your management consultant firm formed by yourself. he has requested you to work out the price to quote his clients for these two routes considering the costs involved. he expects to earn a minimum profit of Rs.1000 per day per truck after meeting all expenses.your analysis of market conditions tell you the following: Vehicle cost Rs 7 lacs Depreciation 15% maintenance costs per day Rs. 150 drivers monthly salary Rs.5000:Attendents monthly salary Rs.3000. Misc expenses Rs. 200 per day. drivers allowance is Rs.125 per day and attendent gets Rs.75. diesel cost per litre is Rs.25 and the vehicle gives an average mileage of 4 km to a liter. the financial insttiations offer loans at 10% interest pa, which Ramjee has been negotiating. it has been observed that on an average the vehicle covers 400 km per day. the distance between mumbai to delhi is 1500 km and mumbai to chennai is 1350km the driver gets rest day in mumbai only for one day after return they from any trip
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