How not to fall into the "minus"? - Monitoring the cost-effectiveness of routes
In the article Optimal routing - delivery of equipment and work crews, we slightly described the system's capabilities of calculating the cost of points while planning routes.
Also in the webinar Calculate the cost of routes, we showed how the cash calculation model works, in which the service first of all selects vehicles with lower tariffs for planning.
The "financial" capabilities of the system are not limited to this. The user can also calculate the profitability of routes. This calculation allows you to exclude unprofitable points from the route or calculate additional profit for them, which will always allow you to get the most profitable routes.
We will calculate the profitability of routes in 3 different versions, and having determined the optimal one for ourselves, we will copy the route to the main one. Before the calculation, do not forget to copy the calculation parameters from the "Basic" version to other versions in order to obtain objective results.
So, we will choose Version 1. In this version, the route will be calculated taking into account profitability. To do this, in the Additional parameters box, go to the Calculation modes tab, in the Calculation of profitability field, select Do not exclude unprofitable points from routes. Save the changes OK and start generating routes:
Expenses are 4649 monetary units higher than the Profit received from the points, which makes this route unprofitable. Below, in line № 2, the number of unprofitable points is displayed, the total profit of which is less than the Expenses. Lower, in the subordinate route box, unprofitable points are marked with the corresponding icon:
Pay attention! The columns Expenses and Profit in routes, and Profit and Extra profit are displayed using the Table Settings directory.
For the next calculation option, select Version 2. In the Routes formation box, select the same vehicle. In this case, in the Calculation of profitability field, select Exclude unprofitable points from routes:
In this calculation, the system excluded all unprofitable points from the route, calculating the route only for 1 point. The profit from delivery to which exceeds the Expenses:
Version 3. In this calculation option, we will offer the system itself to determine the extra profit that needs to be received from unprofitable points so that the route turns out to be profitable.
In the Routes formation box, select the same vehicle, and in the Calculation of profitability field, select Add to profitability:
In contrast to the first version of the calculation, the profit in this route is 18 units higher, which makes it profitable, while, unlike the second version, there were not any points excluded from the route. The system determined the amount of extra profit (in other words, how much more money you need to take from the client for delivery) to make this route profitable:So there are 3 calculation options:
- The system calculated the route for all points, indicating at the same time which of them are unprofitable in this transport task;
- The system calculated the route only for cost-effective points, the remaining points are excluded from the route;
- The system calculated the route for all points, while additional profit was calculated for unprofitable points;
Which option to choose? - of course, it depends on the processes established in your company. If, for example, the 3rd option is more suitable for you, just copy the routes into the main version of the calculation:
After copying, the routes will be displayed in the Main version, and the order points will be marked as those for which the routes have already been calculated, i.e. will not be active for calculations.
Now let's complicate the task. We will load 120 delivery points and calculate the profitability. In this case, the system has calculated 2 routes and it is already more difficult to find points for which additional profit is calculated:
An example of a report in the form of a table:
Pay attention ! If you didn't find the corresponding report - it needs to be created. If you are our client - contact support and we will add a report to your account.
Let's summarize. The calculation of profitability gives an understanding of whether your transport service is working to "plus" or "minus". If the expenses in most cases are greater than the profit, this indicates that it is time not only to look for new ways to optimize costs, but also to revise the cost of delivery.
If you are interested in the described functionality, we are ready to demonstrate its operation, perform the necessary settings and provide access to the service. To do this, leave a request on the ANT-Logistics website.