In 2025, a nationwide logistics firm installed AI-driven route optimization software across its entire delivery fleet to reduce fuel consumption per trip. Over the following year, fuel prices remained completely stable, and the average fuel consumed per delivery dropped by 15 percent. Paradoxically, the firm's total annual fuel expenditure for the fleet increased by more than 10 percent over the same period.
Which of the following, if true, most helps to resolve the apparent discrepancy described above?
- The efficiency gained from the software enabled the firm to secure new commercial accounts and complete 40 percent more total deliveries during the year than in the previous year.Answer
- BThe software licensing fees and ongoing IT maintenance expenses exceeded the total financial savings achieved from the reduced fuel consumption per delivery.
- CThe route optimization system frequently rerouted delivery trucks along longer highway bypasses, causing vehicles to cover more miles per delivery.
- DDrivers operating in rural territories were significantly less likely to follow the software's turn-by-turn recommendations than drivers operating in dense metropolitan zones.
- EThe logistics firm retired several older, fuel-inefficient delivery vans halfway through the year and replaced them with high-efficiency hybrid models.
Answer
The apparent discrepancy is resolved by the option explaining that the efficiency gained enabled the firm to complete 40 percent more total deliveries, increasing total fuel consumption despite lower fuel usage per trip.
The correct answer resolves the discrepancy by introducing a third variable: total delivery volume. Total fuel expenditure equals fuel per trip multiplied by total trips. If the fuel per delivery drops by 15 percent but the total number of deliveries increases by 40 percent, overall fuel consumption and expenditure will increase despite the improved per-trip efficiency.
Step-by-Step Solution
Key Concept
Rate versus Total Volume Discrepancy