Change is the only way to stay ahead in a competitive environment. That is why company ABC has
adopted a new focus on supply chain and is moving away from old warehouses to new, leaner, central
warehouses. The company has decided to consolidate 240 of their warehouses into 5 new warehouses.
Along with the warehouse centralizations, company ABC also needs to assess the productivity of their
fleet. It must also be determined if the current fleet will be able to meet the requirements of the new
In this document, a study is performed to establish the optimal service life of a vehicle. As with any
company, ABC also has some vehicles in their fleet that is nearing the end of their Economic Service life.
The plan is to replace these vehicles over the next few years in the most cost effective way possible.
Secondly, a study is performed to establish the optimal fleet mix. Warehouse centralizations have
numerous advantages as a result of fewer facilities that need to be maintained and run. Another
advantage of warehouse centralizations is the possibility of the fleet to perform milk-runs. This ability to
perform milk-runs could result in larger loads that need to be transported. Subsequently, the possibility
of using different vehicles with different capacities must be considered. This is the reason why it is
necessary to calculate the optimal fleet ratio of one-tonner to four-tonner vehicles.
Lastly, a study is done on the current fleet to establish how the fleet will be transformed in the most
cost effective way. This is done by using the results of the Economic Service Life and fleet mix study. The
deliverables form the aforementioned study is used as a guide to decide which vehicles need to be
replaced at what stage. At this stage of the study, it could also be beneficial to consider various brands
of vehicles to see if there could be vehicles that are more cost effective to run than the current models.
This document concludes with a summary of the cost savings, should the abovementioned results be
Thesis (B Eng. (Industrial and Systems Engineering))--University of Pretoria, 2010.