Set one comparable decision contract
Record these assumptions before calculating
- Route start/end, kilometres or miles, and travel time. (not complete)
- Number of completed and failed visits. (not complete)
- Contribution before travel for each job. (not complete)
- Loaded travel labour and vehicle cost on compatible units. (not complete)
- Zone, time window and day-of-week labels. (not complete)
route contribution = sum of job contributions before travel - travel labour - vehicle cost - route-specific cost
- job contribution before travel
- Job price less on-site labour, material and other non-travel variable cost (CU per job) — job record
- travel labour
- Dispatch-to-arrival and between-job travel time at loaded cost (CU per route) — route and labour record
- vehicle cost
- Fuel/energy, maintenance, lease/depreciation and other included vehicle resource (CU per route) — vehicle record or explicit scenario
Keep one currency, indirect-tax basis, time horizon and cost boundary throughout. Scenario values below are invented currency units (CU), not benchmarks.
Worked example: Travel Radius and Route Density
Invented daily routes: Inner completes 6 jobs with 90 CU pre-travel contribution each and 150 CU route travel cost; Outer completes 4 jobs at 110 CU each and 210 CU route travel cost.
| Line | Calculation | Result |
|---|---|---|
| Inner route contribution | 6 × 90 - 150 | 390 CU |
| Inner per completed job | 390 ÷ 6 | 65.00 CU |
| Outer route contribution | 4 × 110 - 210 | 230 CU |
| Outer per completed job | 230 ÷ 4 | 57.50 CU |
| Case | Changed input | Decision result |
|---|---|---|
| Outer 3 jobs | 3 × 110 - 210 | 120 CU |
| Outer 4 jobs | 4 × 110 - 210 | 230 CU |
| Outer 5 jobs | 5 × 110 - 210 | 340 CU |
Turn the calculation into an operating decision
- Export or record actual route and job data without customer-identifying details.
- Calculate contribution before travel per job.
- Assign travel labour and vehicle resources by route.
- Compare zones and density bands.
- Test surcharge, scheduled area days and radius changes.
- Review failed visits and route variance before changing policy.
- Pricing from straight-line distance.
- Ignoring unpaid travel labour.
- Using revenue rather than contribution before travel.
- Treating failed access as a completed stop.
- Expanding radius from one unusually dense route.
Questions to settle before acting
- Should route cost be divided by jobs?
- For review, yes, but retain the route total and job-level contribution so a low-value stop does not disappear inside an average.
- Is a surcharge the only response?
- No. Area days, tighter booking windows, minimum job value, route redesign or declining the work can be compared.
- How much route-density and travel history is enough?
- Use enough comparable routes to see normal variation, and label sparse zones rather than manufacturing certainty.
Sources and methodology
- Travel Radius and Route Density: calculation boundary — Margin101: Formula, unit, assumption and limitation reference for the primary decision handoff.
- Vehicle Cost Calculator — U.S. Department of Energy Alternative Fuels Data Center: Vehicle-cost component reference only; route values remain business records.