THE FEASIBILITY OF LOWERING ENERGY COSTS THROUGH REDUCED DELIVERY FREQUENCY

The feasibility of reducing delivery frequency as a means of lowering energy and transportation costs is examined. Four reduced delivery situations are examined using a net present value criteria. While substantial energy savings are possible the cost of equipment necessary to accommodate these reductions outweighs the energy savings at current fuel prices. Substantial fuel price increases are required before such reductions are worthwhile. Good management requires examination of the net effect of energy savings on net revenue.