ANALYZING THE ECONOMIC FEASIBILITY OF TRUCK FLEET INVESTMENT IN OIL TRANSPORTATION: A CASE STUDY OF NOPPARAT PETROLEUM CHIANG MAI CO., LTD.
Keywords:
Economic feasibility, Truck fleet management, Oil transportation, Return on investmentAbstract
This study aims to develop an economic feasibility analysis tool and compare investment alternatives between outsourcing logistics services and investing in fixed assets for in-house transportation operations. The case study focuses on Nopparat Petroleum Company Limited and Nopparat Trans Company Limited, which transport petroleum products from a depot in Phichit Province to service stations in Chiang Mai Province. A quantitative case study approach was employed, utilizing Microsoft Excel to develop a financial model for analyzing cost structures and evaluating investment feasibility under three scenarios: (1) full outsourcing of transportation services, (2) a hybrid operation combining outsourcing and in-house transportation, and (3) full in-house fleet operations. The analysis was conducted using three primary financial indicators: Return on Investment (ROI), Net Present Value (NPV), and Payback Period, complemented by break-even analysis, sensitivity analysis, and one-way analysis of variance (ANOVA). The results indicate that full in-house fleet operations provide the highest economic return, with total annual costs of 5,123,014.66 baht, compared to 7,525,627.21 baht per year for full outsourcing. This represents an annual cost saving of 2,402,612.55 baht, equivalent to a reduction of 31.92%. Financial performance indicators clearly demonstrate the investment’s economic viability, with an ROI of 32.88% and a payback period of 2.13 years. Break-even analysis reveals that the minimum transportation volume required is 22 trips per month, which is lower than the current operating volume of 24 trips per month. The study recommends investing in an in-house truck fleet and implementing a shuttle-based transportation management system supported by an integrated management framework. The developed economic analysis tool can be effectively applied to small and medium-sized enterprises in the logistics industry.
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