On the last math question, the solution assumes the onboarding cost keeps growing at 10%. So from 50k in the first year, to 55k in the second, and so on. However, it is supposed to be a one-off cost (I guess you only need to train the drivers once). Assuming so, First year you train 250 drivers, second year you only need to train the 25 new ones. In that case, the onboarding costs in the second year will be 5k (25 drivers * 200).
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Hi Alvaro,
I would be happy to share my thoughts on your question:
- Your observation regarding the onboarding costs seems to be correct. The assumption of a 10% annual increase does not seem meaningful if the costs are a one-off for new driver training.
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I agree with you. You only need to support that cost for new drivers.
One could raise the question about driver turnover, which is not considered in the case, but would happen in real life. But that would only lead to having to train even more drivers.
