PEPSI

COCARRI
ERSELECTI
ON-ANALYSI
S

I
ntr
oduc
tion Agenda KeyObser
vat
ions Tr
endsf
rom t
hePast Car
rierChur
nEec
t Impac
t
of
Geog.
.

I
nfor
msDat
aAnal
yt
ic
sCompet
it
ion-Pepsi
Co
Team:Aggi
eAnal
yti
cs

Team member
s:Pr
iyesh,Subbr
ammani
an,Pr
adeep
 PEPSI
COCARRI
ERSELECTI
ON-ANALYSI
S

I
ntr
oduc
tion Agenda KeyObser
vat
ions Tr
endsf
rom t
hePast Car
rierChur
nEec
t Impac
t
of
Geog.
.

Agenda

1.Keyobservati
ons
2.Trendsfrom thepast
3.Cr
iteri
aforfutureevaluat
ion
4.Carri
erselecti
ontool
5.Execut
ivesummar y
 PEPSI
COCARRI
ERSELECTI
ON-ANALYSI
S

I
ntr
oduc
tion Agenda KeyObser
vat
ions Tr
endsf
rom t
hePast Car
rierChur
nEec
t Impac
t
of
Geog.
.

KeyObser
vat
ions
(
AnnualCar
rierSel
ect
ionPr
ocess)

1.Bidsarerecei
vedf
r om severalcarri
ersfor20di sti
nctr
out
es
across33c iti
es
2.Aroutemaybespl itamongmul tipl
ecar ri
ers
3.Onl
yonebusinessuni toperatesonanygi venlane
4.Car
riersmayoperat
ewi tht heirownasset sorusingThir
dPart
y
Logistics
 PEPSI
COCARRI
ERSELECTI
ON-ANALYSI
S

I Agenda KeyObser
vat
ions Tr
endsf
rom t
hePast Car
rierChur
nEec
t I
mpac
tofGeogr
aphy Imp
. act
. of.
.

Tr
endsf
rom t
hePast

1.Carri
erChurnEec t
2.ImpactofGeography
3.I
mpac tofBidVolumeI ndex
4.StandardDeviati
onSpr ead
5.EectofOwnAsset s
 PEPSI
COCARRI
ERSELECTI
ON-ANALYSI
S

. KeyObser
vat
ions Tr
endsf
rom t
hePast Car
rierChur
nEec
t I
mpac
tofGeogr
aphy I
mpactofBi
dVol
ume Sta
I
ndex nda
rd..

Car
rierChur
nEec
t
6

Hi
ghCarr
ierChurn
5
Aver
ageAbsolut
e
Vari
ance
$100,
841
$108,
433
4 $189,
971
n
erChur

$154,
052

3
i

$102,
547
r
Car

$50,
145
2.
200
2 $20,
955 $45,
716
$101,
937
$7,
619 Low Car
rierChur
n
Aver
ageAbsoluteVarianc
e

1 $43,
674
$12,
230
$102,
432
0 0.
000
2 3 4 5 6 7 8 9 10 11 12 13 14
Numberofdi
sti
nctc
arr
ier
sused
 PEPSI
COCARRI
ERSELECTI
ON-ANALYSI
S

. Tr
endsf
rom t
hePast Car
rierChur
nEec
t I
mpac
tofGeogr
aphy I
mpactofBi
dVol
ume StandardDevi
ati
on Car
I
ndex Spread ri
er
Co..

I
mpac
tofGeogr
aphyonVar
ianc
e

TACOMA,WA-SPOKANEVALLEY,WA

BURNSVI
LLE,MN-ABERDEEN,SD

LANCASTER,TX-OMAHA,NE MOUNTAI
NTOP,PA-UXBRI
DGE,MA
MOUNTAI
NTOP,PA-I
NDI
ANAPOLI
S,I
N
TOLLESON,AZ-NORTHSALTLAKE,UT
DENVER,CO-GREELEY,CO CARLI
SLE,PA-CHESHI
RE,CT

CI
NCI
NNATI
,OH-FORTWAYNE,I
N
CARLI
SLE,PA-SALI
SBURY,MD

WYTHEVI
LLE,VA-COLUMBI
A,SC
TAMPA,FL-COLUMBI
A,SC

TRACY,CA-TOLLESON,AZ
 PEPSI
COCARRI
ERSELECTI
ON-ANALYSI
S

. Car
rierChur
nEec
t I
mpac
tofGeogr
aphy I
mpactofBi
dVol
ume StandardDevi
ati
on Car
rierCont
ribut
ed Sel
I
ndex Spread Var
iance ect
i
on.
.

Eec
tofBi
dVol
umeI
ndexonAbsol
uteVar
ianc
e
500K

400K
e

300K
i
AbsVaranc

200K

100K

0K

0 1 2 3 4 5 6 7 8 9
Bi
dVol
umeI
ndex
 PEPSI
COCARRI
ERSELECTI
ON-ANALYSI
S

. I
mpac
tofGeogr
aphy I
mpactofBi
dVol
ume StandardDevi
ati
on Car
rierCont
ribut
ed Sel
ect
ionCr
iter
ia Bid
I
ndex Spread Var
iance Sel
ec.
.

St
andar
dDevi
ati
onSpr
eadvsAc
tualCostVar
ianc
e

150K

100K
i e
anc

50K
ualCostVar

0K
t
Ac

-
50K
I
dealar
eato
sel
ectabi
d

-
100K
-
1.500 -
0.900

-
2.2 -
2.0 -
1.8 -
1.6 -
1.4 -
1.2 -
1.0 -
0.8 -
0.6 -
0.4 -
0.2 0.
0 0.
2
St
andar
dDevi
ati
onofChosenBi
dVal
ue
 PEPSI
COCARRI
ERSELECTI
ON-ANALYSI
S

I I
mpactofBi
dVol
ume StandardDevi
ati
on Car
rierCont
ribut
ed Sel
ect
ionCr
iter
ia Bi
dSel
ect
ionTool Su
. I
ndex Spread Var
iance mm
. ar
..

Car
rierCont
ribut
edVar
ianc
e(CCV)
OwnAsset
s?
20K

18K
33%
i
ncr
easeinAvg.CCV
CCV)

16K ift
hecarri
ers
usetheirown asset
s
e(

$14,
204.
22
anc

14K
CCV(
foroneCar
rier
)
i
edVar

12K =
$10,
664.
89
Tot
alVarianc
eintheLane
but

10K
i

x
r
erCont

Car
rierAwardPer
c ent
age
8K
r
Avg.Cari

6K

4K

2K

0K
NO YES
 PEPSI
COCARRI
ERSELECTI
ON-ANALYSI
S

I StandardDevi
ati
on Car
rierCont
ribut
ed Sel
ect
ionCr
iter
ia Bi
dSel
ect
ionTool Summary Tha
. Spread Var
iance Recommendat
ions nky
. ou

Bi
dSel
ect
ionCr
iter
ia

1.St
d.Dev.spr
eadofBi
dRat
e -
1.5t
o-0.
9
2.NumberofCar
rier
s 2t
o4
3.Car
rierChur
n Mi
nimal
4.OwnAsset
s No

5.Ant
ici
patedBi
d 112% ( skLanes)*
Low Ri
Vol
umeIndex 164% (
HighRiskLanes)*

Byc
ombi
ningtheabovecri
teri
a,wehavecr
eat
edar at
ingsyst
em
(Aggi
eAnalyt
icIndex)f
oreac
hbidr
ecei
ved

*LaneriskinessisassessedbasedonGeographicalfactorsasshowninthepreviousslide
 PEPSI
COCARRI
ERSELECTI
ON-ANALYSI
S

Standa Car
rierCont
ribut
ed Sel
ect
ionCr
iter
ia Bi
dSel
ect
ionTool Summary Thankyou
rdDevi Var
iance Recommendat
ions
ati
on..

Bi
dSel
ect
ionTool
Sel
ectLane
CARLI
SLE,PA-SAL
ISBURY,MD

Sel
ect
edCar
rier
s LoadSpl
it
Car
rierCode AAI
ndex
AJ 120 AJ:
2%
FF 120
IM 120
MB 120 MB:
35%
FF:38%
Tot
alEst
imat
edLoad

425
Hi
ghl
ight
s

Tot
alBi
dsRec
eived 58

Aver
ageRat
e/Load $4,
077.
23 I
M :25%

Last3year
sAR/
L $4,
803.
48
 PEPSI
COCARRI
ERSELECTI
ON-ANALYSI
S

Standa Car
rierCont
ribut
ed Sel
ect
ionCr
iter
ia Bi
dSel
ect
ionTool Summary Thankyou
rdDevi Var
iance Recommendat
ions
ati
on..

Exec
uti
veSummar
y

1.Impr ovedemandpl anningaccuracyt oreduceBi dVolumeI ndex,whi ch

direc
t l
yimpac t
svar i
ance.At0Bi dvolumeI ndex,var i
ancevalueswi llbelimited
below $25,000,whichisa80% r eductiononc urrentaver agevari
anc e.
2.Selectbidsthatare-1.5t o-
0.9SDf rom meanbi dval ue.Thisi
spr ojectedto
resultinminimalvariance.
3.Thoughc arri
erdiversi
c ati
onisbett er
,limiti
ngt henumberofc arrier
s
operatingonal anebetween2t o4andpr ovi
dingast ablelongtermc ontrac
t
willr
educ evarianc
ebyupt o60%

Uponi
mplementat
ionoft
hetool,weproj
ectaDecr
easei
n
Var
ianc
eof25% andCostSavi
ngsof15%
 PEPSI
COCARRI
ERSELECTI
ON-ANALYSI
S

Standa Car
rierCont
ribut
ed Sel
ect
ionCr
iter
ia Bi
dSel
ect
ionTool Summary Thankyou
rdDevi Var
iance Recommendat
ions
ati
on..