Sonnen Trucking Company
(4 pages of text)
In January 2013, the new chief executive officer of the Sonnen Trucking Company, a family-owned business, is considering how to reduce fleet insurance costs. As profit margins are very tight and continuing to shrink, she has to think about variables she can control in order to affect the bottom line positively. Insurance costs are the logical item to address since they are based on the company’s safety and accident records and the extent that it is willing to support a deductible. Should she institute a self-insured model or stick with the standard insurance model? She also must choose a risk mitigation/prevention strategy involving either disciplinary measures or the newly developed Drive Safe program. Whatever she decides to do, she must make sure that she retains good drivers and attracts new trainees who will be motivated to focus on safety and good customer relations in order to build the business.
- To understand the notion of operating risk and the different approaches to managing it.
- To understand the different concepts associated with insurance and the use of insurance as a risk management tool.
- To appreciate the intricate relationship between operating risk and operations management (tactical and strategic aspects).
Transportation and Warehousing
Canada, Large, 2012
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