A delivery company is facing a massive surge in total fleet fuel costs. The Fleet Manager blames global oil prices and inflation. But is that the whole story? Students will use a three-factor cost model (Total Cost = Number of Deliveries × Km per Delivery × Cost per Km) to investigate route efficiency. They will calculate exactly how much money was lost due to poor logistical planning rather than fuel prices. 

Roadmap to Solution:

Step 1: The strict sequence for logistics is: Deliveries (Volume) → Km per Delivery (Efficiency) → Cost per Km (Price).

Step 2: We want to isolate the impact of Route Efficiency (Km per Delivery). This is the second factor in the chain.

Step 3: Use the actual Number of Deliveries (Deliveries₁), as it precedes our examined factor.

Step 4: Keep the Cost per Km frozen at its baseline (Cost₀), as it succeeds our examined factor.

Step 5 (Route Efficiency Impact): Multiply them together: Deliveries₁ × (Km₁ - Km₀) × Cost₀.