Simulation-Based Approach to Operating Costs Analysis of Freight Trucking

Natalja Ozernova, Jelena Pecherska


The article is devoted to the problem of costs uncertainty in road freight transportation services. The article introduces the statistical approach, based on Monte Carlo simulation on spreadsheets, to the analysis of operating costs. The developed model gives an opportunity to estimate operating freight trucking costs under different configuration of cost factors. Important conclusions can be made after running simulations regarding sensitivity to different factors, optimal decisions and variability of operating costs.


Costing; modelling; Oracle Crystal Ball; risks; simulation; transportation

Full Text:



Road Freight Transport Vademecum 2010 Report, European Commission DG for Mobility and Transport Unit D.3 – Land transport, September 2011. [Online]. Available: 2010-road-freight-vademecum.pdf. [Accessed: Apr. 1, 2015].

Nozaru izpēte profesionālajai izglītībai – 2. daļa: transporta un loģistikas nozare, Valsts izglītības attīstības aģentūra, October, 2011. [Online]. Available: zpete_profesionalai_izgltibai_transports.pdf. [Accessed: Apr. 1, 2015].

B. Berwick, M. Farooq, Truck Costing Model for Transportation Managers, 2003.

B. Berwick, M. Farooq, Truck Costs for Owner/Operators, 1997.

W. F. Chen, Transportation System Planning. Methods and Application. USA: CRC Press LLC, 2003, pp. 18-25, 129-130.

K.P. Gupta, Cost Management. Measuring, Monitoring and Motivating Performance. India: Global India Publications, 2009, pp. 199–201.

D. Levinson, M. Corbett, M. Hashami, Operating Costs for Trucks, 2011.

I.A. Moosa, Operational Risk Management. United Kingdom: Palgrave Macmillan, 2007, pp. 1–25.

Risk Management – Principles and Guidelines. International Standard ISO 31000:2009, 2009.

P. Curtis, M. Carey, Risk Assessment in Practice. Committee of Sponsoring Organizations of the Treadway Commissions, 2012. [Online]. Available: dt2IntrnlCntrlIntgratdFrmwrk%20-%20for%20merge_files/COSO- ERM%20Risk%20Assessment%20inPractice%20Thought%20Paper%2 0OCtober%202012.pdf. [Accessed: Apr. 1, 2015].

H.P. Berg, “Risk Management: procedures, methods and experiences,” Reliability: Theory & Applications, vol. 1, pp. 79–95, 2010.

P. Jorisson, Financial Risk Manager Handbook. USA: Wiley&Sons, 2011, pp. 1–24.

European Commission. EU transport in figures. Statistical Pocketbook 2014. [Online]. Available: statistics/doc/2014/pocketbook2014.pdf. [Accessed: Apr. 1, 2015].

J.J. Coyle, R.A. Novack, E.J. Bardi, Transportation. A Supply Chain Perspective. USA: South-Western Cengage Learning, 2011, 494 p.

G. Birzietis, Transporta vadība un loģistika: Mācību līdzeklis. Latvija: Jelgava, LLU, 2008, pp. 143–145.

H. Cheng, “Uncertainty Quantification and Uncertainty Reduction Techniques for Large-scale Simulations,” Ph.D. dissertation, Virginia Polytechnic Institute and State University, Virginia, USA, 2009.

S. Apeland, T. Aven, T. Nilsen, “Quantifying uncertainty under a predictive, epistemic approach to risk analysis,” 2001.

J.R. Evans, D.L. Olson, Introduction to Simulation and Risk Analysis. USA: Prentice Hall, 1998, 279 p.

R. A. Howard, J. E. Matheson, “Influence Diagrams,” Decision Analysis, vol. 2(3), pp. 127–143, 2005.

C.J. Burgess, I. Dattani, R. Keartion, “Using Influence Diagrams in Software Change Management,” in 7th International Conference on Software Quality Management (SQM'99), Software Quality Management VII, London, UK,1999, pp. 177–187.

Tatman, “Decision Process in Influence Diagrams: Formulation and Analysis,” Ph.D. dissertation, Stanford University, Stanford, USA, 1985.

SmartDraw Influence diagrams. [Online]. Available: [Accessed: Apr. 1, 2015].

Lumina Influence diagrams. [Online]. Available: m/technology/influence-diagrams/. [Accessed: Apr. 1, 2015].


  • There are currently no refbacks.

Copyright (c) 2015 Natalja Ozernova, Jelena Pecherska

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.