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United Kingdom and offered international transport services to the EEC and other
destinations. The costing system was based on one or more of three possible tariffs. One
tariff was based on weight and guaranteed delivery within 48 hours within the United
Kingdom; two international rates, one using air freight and the other offering consolidated
loads for onward delivery to overseas customers. The UK tariff worked out at
approximately € 2 per kilo on a national basis; EEC tariff were € 8 per kilo (air freight) and
€ 3.50 when loads were consolidated.
FDS Services. FDS was one of the major national firms with a local office near to Burke
Engineering. FDS provided contract hire vehicles for a range of transport requirements:
from very large loads to small vans including drivers when required. Because it was a
contract hire company, there was a standard charge associated with each vehicle,
generally over a three year period. The contract hire cost, which included all driver and
maintenance costs, but not fuel, ranged from (€ 17,000 for a small van to € 65,000 for the
largest truck.
Advance Trucking. Advance Trucking was a small firm with offices only 2 miles from Burke
Engineering which offered a highly flexible service. It would provide freight forwarding for
overseas customers on the basis of € 5 per kilo throughout the EEC and national delivery
on a sliding scale; with small deliveries below 200 kilos costing € 3 per kilo and deliveries
above 1,000 kilo around € 2 per kilo, falling to € 1.5 per kilo for 20,000 kilo loads.
Catering
The plan involved both a considerable drop in the overall number of people employed by
Burke, and a move towards 16 or 24 hour production from the single current 8 hour shift,
with the factory changing from 5 to 7 day working. This would mean that the current
catering operation would have to be drastically overhauled to meet the new demands
being placed upon it. Daily lunches would drop from 350 to around 95, and the company
would also have to provide the same number of evening meals and breakfasts on a daily
basis. Currently, catering costs were a major overhead cost to the company.
With the split canteen system, the subsidy per meal ranged from € 2.50 (managers), at an
average cost of € 3.00 (a total estimated subsidy of € 80,000 per annum) and € 0.80 per
shop floor employee at an average cost of € 1.20 (an estimated annual subsidy of €
70,000 per annum). The catering operation enabled the company to entertain in house, a
costs which would otherwise have to be borne by the individual departments. In the
previous year there had been 350 visitors entertained in the management dining room,
though the total number of potential customers entered in the sales log was only 80. You
have asked for quotes from three catering organisations for their proposals to replace the
current catering service, based on the creation of a single canteen for all staff.
Grand Picadilly. Grand Picadilly was a subsidiary of one of the national firms, with
substantial experience in providing on site catering for all types of industrial operation. It
had quoted an inclusive fee of € 35,000 to provide the level of meals anticipated in the self
service operation, but they would not be able to make any special provision for visitors.
Meal costs would rise to an approximate € 1.50 for all staff.
Extra Catering. Extra Catering was one of the local firms that supplied catering services to
the three factories nearest to the Burke Engineering site. It had come to inspect the current
operation, and was of the opinion that it could provide a substantially better service at
lower cost. First, it would introduce microwave cookers and self service chilled cabinets
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