A construction company has been offered a build-operatecontractfor $7.8 million to construct million to construct andoperate atrucking route for five years to transport ore from a minesite toa shelter. The
shelter is located on a major highway and the mine is 3kmintothe bush off the road.
Construction (capital) costs are estimated sa follows:
Upgrade to the highway (i.e. repaving) will be $200 000/km
New gravel road from the mine to the highway will be$500000/km
Operating consitions are as follows:
There will be 100 return trips each day for 300 days a yearforeach of the five years
the mine will be open
Operating costs on the gravel road will be $65/h andaveragespeed will be 40 km/h
Operating costs on the highway will be $50/h and averagespeedwill be 70 km/h.
Explain what aspects should be taken intoconsiderationwhen determining the path the
trucks should follow.(C5).
Determine the distance of paved and gravelsectionsproducing optimum conditions (maximum
