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ABG Area Bus Company (A)The Alpha Beta Gamma Area Bus Company had been set up by Mr. Vipul Jainafter having struggled hard with the local issues li!e bad roads acceptability ofbus routes etc. during the early years of development of the Areas in the mid"##$s.

%ow after years of hard toil Mr. Jain who in the early years of setting up his BusCompany used to thin! that soon this phase would be over and he would be ableto sit bac! and rela& ' or perhaps devote time to social causes close to hisheart ( was loo!ing ' trying to ma!e some sense out of them ( at the companyreport giving figures of ever increasing incidence of maintenance of the fleet ofbuses which were naturally getting older day by day on the one hand and on theother the passengers)users were always vehemently opposing any proposed farehi!es realised perhaps a little late in the day that he was wrong in his thin!ing inthe early days when he used to toil hard to get loans ' for financing the buses (permits ' for bus routes ( sanctioned from the authorities. %ow he could see that

his problems had only changed in nature and had moved to areas li!e *replacement of old buses with new and more efficient ones maintenance ofbuses roadworthiness certifications for buses etc.

%o sooner he realised that all this was getting a bit too much for him hesummoned Mr. +uman Gupta the General Manager ' ,perations ( of the ABGBus Company and handed over the maintenance figures report concerned withclutch failures on a random sample of "$$ buses he was loo!ing at to him whichwas presented as given in the table below -

Miles of use '$$$ ( /ercentage of survivors

at the start of the intervalwhich fail during theinterval

$01 $

102 3

204 2.5

40# "5.5

#0"$ "6.5

"$0"" "2.#

""0"5 5$.$

"50"3 "4.5

"30"7 "#.7"70"6 "2.5

"60"1 5$.4

"10"2 3".1

"20"4 3$.4

"40"# 77.7

"#05$ 1$.$

5$05" "$$.$

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8aving handed over this to +uman he as!ed him to present a comprehensiveMaintenance /lan for the entire bus fleet owned by ABG Bus Company in a

wee!s time . 9or a while even +uman did not !now what hit him but he !newvery well that to save his :ob he had to come up with something veryeconomical and worthwhile.

+uman applied his mind hard to the situation on hand over the ne&t two daysand then called for the Manager ' maintenance ( Mr. Aa!ash Agarwal and gavehim the following information in addition to the tabular report given to him byMr. Jain. The variable operating costs average 5$ paise )per mile)bus whilst theaverage revenue derived from a 5$0mile :ourney is ;s. 5$.$$. The total cost ofreplacing a clutch is ;s. "5$.$$ and the average cost of recovery and lostrevenue for a bus with a defective clutch is ;s. 56$.$$.