A study on zonal-wise comparative performance of the Apsrtc – an analysis

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An analysis of an individual organization may lead to the apparent conclusion that it is satisfactorily working and making an improvement over the period. However, a different picture may emerge in comparative analysis of the performance of its units of the organization.

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International Journal of Management (IJM) Volume 7, Issue 7, November–December 2016, pp.01–15, Article ID: IJM_07_07_001 Available online at http://www.iaeme.com/ijm/issues.asp?JType=IJM&VType=7&IType=7 Journal Impact Factor (2016): 8.1920 (Calculated by GISI) www.jifactor.com ISSN Print: 0976-6502 and ISSN Online: 0976-6510 © IAEME Publication A STUDY ON ZONAL-WISE COMPARATIVE PERFORMANCE OF THE APSRTC – AN ANALYSIS G.V. Chalam Professor, M.Com, LL.M., M.B.A., Ph.D., Department of Commerce & Business Administration, Acharya Nagarjuna University, Andhra Pradesh, India Dr. Nohmaan Ali B.E., M.B.A., Ph.D., Salarjung Colony, Hyderabad, India ABSTRACT An analysis of an individual organization may lead to the apparent conclusion that it is satisfactorily working and making an improvement over the period. However, a different picture may emerge in comparative analysis of the performance of its units of the organization. Thus, inter-firm comparison is the only tool, which may pinpoint the strengths and weaknesses of the organization. Keeping this in view, an attempt has been made in the present paper to compare the zone-wise operational performance of the APSRTC. There are various techniques that are used in analyzing the comparative performance of the business organizations. Among these techniques, ratio technique is most appropriate to examine the performance of the business organizations in different dimensions. Therefore, the studies of this type are used the ratio analysis to evaluate the comparative performance of the zones in the selected organization. From the review of the earlier studies, it is opined that many of these studies have been conducted on the financial performance of the total organization in general. Further, most of the studies were conducted on the financial performance without comparing the cost-revenue relationships of different variables to know the cause and effect of the situation to understand and to improve the performance of the undertaking. After the review of the various studies made so far, there are no studies made so far on the zonal-wise performance evaluation in this direction. Against this background, an attempt is made in this paper to study the comparative zonal performance of the APSRTC. Key words: Operational performance, Occupancy ratio, Employee productively, Crew utilization, Financial performance, Earnings per Kilometer, Profit per Kilometer. Cite this Article: G.V. Chalam and Dr. Nohmaan Ali, A Study on Zonal-Wise Comparative Performance of the APSRTC – An Analysis. International Journal of Management, 7(7), 2016, pp. 01–15. http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=7&IType=7 http://www.iaeme.com/IJM/index.asp 01 editor@iaeme.com
G.V. Chalam and Dr. Nohmaan Ali 1. INTRODUCTION A comparative performance analysis requires an understanding of different indicators across the comparable units of the study. In fact, the external factors that affect performance of any service organization are cost of service, rate if inflation, interest rates, exchange rates and government policies. On the other hand, the internal factors include structure of the organization, motivation of employees and employee productivity, cost control mechanism and the utilization of firm’s resources. Further, the income of the organization is affected one way or the other by the state of the economy, ability of the management to handle the market condition, quality and marketing of the product. There are various methods or techniques that are used in analyzing the comparative performance evaluation of the business organization. Among the various techniques of the comparative performance evaluation, ratio analysis is most appropriate to examine the performance of the business concerns in different dimensions. Therefore, the studies of this type are used the ratio analysis to evaluate the comparative performance of the zones in the selected organization. 2. REVIEW OF LITERATURE Satyanarayana. Y. (1976) in a comprehensive study of major State Transport Undertakings in India analyzed itemized costs and performance of the STUs and ultimately suggested a management control system to harness the performance of the STUs. Krishna R. R. (1977) in his study on debt-equity ratio in road transport corporations in Tamilnadu and found that the debt-equity ratio in almost all the selected road transport corporations in Tamilnadu has shown an upward trend during the period of study. He suggested that the STUs, which are under social obligation to ply buses on uneconomic routes in remote areas and to invest more funds to the corporation, should liberally be contributed in the form of equity or to convert a portion of their debt as share capital to strengthen its equity base and to reduce the imbalance in the capital structure. Walters (1979) in his study attempted to establish a relationship with respect to profitability and costs of buses of different sizes, and inferred that there was no evidence of scale of economies in large buses. Satyanarayana. J (1985) undertook a study on the performance of the APSRTC by examining the cost-fare relationships and operational performance, capital structure and financial policies. Viswanatham, V. (1986), in his study on finances of public enterprises analyzed the performance of the APSRTC in terms of deployment of funds, physical and operational performance, cost-fare relationship which have a bearing on the finances and improving the overall performance of the corporation. He suggested that the corporation should attempt to make a proper study on lose making routes and evolving a suitable machinery to ensure the financial health of the organization is not jeopardized. Srinivas Prasad and Mohd Akbar Ali Khan (1996), in their study attempted to examine the financial implications of the social obligations entertained by the APSRTC. The study concluded that the net effect of the social obligations would be the increasing dependence of the corporation on the participating governments not only the increasing dependence of the corporation on the participating governments not only for financing the replacement and expansion but also the cost of meeting the social obligations. The study suggested various measures like quantifying the actual kilometers operated on bad surface roads to estimate the extent of losses of the APSRTC, which has been incurring losses due to the wide variations in the cost of operation on different types of roads. Reddy RVS (1999), in his study on social objectives and finances of STUs suggested that the APSRTC as an instrument of social policy is required to provide transport sometimes even below the operating costs on purely social considerations to certain classes of consumers in certain inaccessible areas. He also made a comment that the presence of the social objectives in reducing the surpluses available directly affect the financial performance and indirectly influence the size of the internal finances available for financing the expansion programs of the corporation. So, the study suggested that at least the amount of financial implications on account of social obligations should be reimbursed by the government to facilitate an objective study of the corporation’s performance and contribution to the society. http://www.iaeme.com/IJM/index.asp 2 editor@iaeme.com
A Study on Zonal-Wise Comparative Performance of the APSRTC – An Analysis Rama Chandraiah C. and A.K. Patnaik (2003), in their study on the state eroding public sector profitability- The case study of the APSRTC analyzed how several political and economic policies of the state are responsible for the erosion of financial performance of the APSRTC. According to them, the two main strategies used by the government to undermine the APSRTC are the positions of discriminatory motor vehicle tax on its own transport sector and ignoring illicit operations by the private operators. Sankar Rao. N (2013) “Impact of Power Sector Reforms in Andhra Pradesh and Causes of the Continuing Power Crisis” for the period 1998-1999 to 2005-2006. In this, the researcher made an attempt on the genesis of power sector in Andhra Pradesh and evaluates the causes for power crisis in Andhra Pradesh in spite of power sector reforms. Vanita (2013) studied the “Performance Appraisal of Power Sector in Haryana” examined the entire performance appraisal of power sector and focuses of employee’s satisfaction in particular with the different variables. Debasish Sur and RajorsiPanja (2014) in their research on “Profitability Trends in NTPC Limited during the Pre-and Post-Liberalization Period” made a comparative analysis of the profitability of NTPC Limited during pre and post liberalized period and arrived that there was an impact of reforms on the working of the organization. Nohmaan Ali and Chalam. G.V (2015), made an attempt on the evaluation of financial performance of State Road Transportation Corporations”. In this research paper researchers examined the financial performance of public utility services in Andhra Pradesh. From the review of the earlier studies, it is opined that many of these studies have been conducted on the financial performance of the state road transport undertakings in general. Further, most of the studies were conducted on the financial performance without comparing the cost-revenue relationships of different variables to know the cause and effect of the situation to understand and to improve the performance of the undertakings. After the review of the various studies made so far, there are no studies made so far on the zonal-wise performance evaluation in this direction. Against this background, an attempt is made in this paper to study the following objectives. 3. AIM OF THE STUDY Against this background, an attempt is made to examine the zone-wise performance of the APSRTC during the period 2008-09 to 2013-14. An analysis of an individual unit may lead to the apparent conclusion that it is satisfactorily working and making an improvement over the period. However, a different picture may emerge when compared with the performance of its various zones. Thus, inter-firm comparison is the only tool, which may pinpoint the strengths and weaknesses of the organization. Keeping this in view, an attempt has been made to compare the zone-wise operational performance of the earliest APSRTC. 3.1. Objectives of the Study More specifically, the following are the objectives of the study: • To analyze the zonal-wise comparative performance of the Andhra Pradesh State Road Transport Corporation during the selected period of the study. • To offer the suggestions for the effective working of the selected corporation for providing better services to the society. 3.2. Methodology of the Study 3.2.1. Source of Data The present study is based on secondary data collected from the annual reports of the Andhra Pradesh State Road Transport Corporation and the various issues of reports, journals, working papers and newspapers were also accessed for the relevant. http://www.iaeme.com/IJM/index.asp 3 editor@iaeme.com
G.V. Chalam and Dr. Nohmaan Ali 3.2.2. Scope of the Study The present study is limited to compare the financial and operational performance of different zones of the selected state road transport corporation during the period of study. Hence, the study focuses on analyzing the various factors, viz., the operational performance indicators, like fleet held, operated, utilization both hired and owned vehicles, occupancy ratio, rate of accidents, ratio of break down and cancellations, HSD and LUB oil per kilometer consumption type life and employee productively, crew utilization, etc. Further, the financial variables, viz., earnings per kilometer, per bus and day, gross and net earnings per kilometer and profit per kilometer, etc. are taken for the purpose of analysis. 3.2.3. Period of Study To draw valid conclusions, a period of minimum five years is required for this type of studies. Hence, the present study covers a period of 6 years from 2008-09 to 2013-14. The study is mainly based on secondary data, which was collected from the various annual reports and other administrative reports of the selected organization. 4. STATISTICAL TOOLS An evaluation of comparative performance across the zones, relevant statistical techniques, viz., mean values, standard error of mean, standard deviation and chi-square were also used for the analysis. 4.1. Network of the APSRTC The APSRTC provides its services to all the major towns and cities in Andhra Pradesh. The entire network is under the administrative control of 23 regional managers in the respective zones. The zonal headquarters are located at Hyderabad. During all the years of the existence of the corporation the dedicated service to the traveling public, it has registered a phenomenal growth and now it occupies a prime position among the state transport undertakings in the country with 22,289 buses and 1, 21,558employees.It has a network of passenger road transport services operating from 210 depots in the state. The percentage of nationalization stands at 95 per cent and in fact every citizen is a share holder of this Corporation. The total bus stations in the state are 773 and 1881 bus shelters are there throughout the state. At present all 210 depots, the activities are computerized for the benefit of passengers and smooth administration. The corporation’s buses cover 82.40 lakhs kms, and carry 147.84 lakhs people to their destinations every day. They connect 24,336 villages to all the major towns and cities in the state, which constitute 95 per cent of road transport. The APSRTC operates its services to the adjacent states, viz., Chennai, Pondicherry, Karnataka, Maharashtra, Goa, Odisha and Chhattisgarh. The APSRTC is divided into total 7 zones, viz., Hyderabad City, Hyderabad, Karimnagar, Nellore, Kadapa, Vijayawada and Vizianagram. The average mean of the following key indicators is taken in order to analyze the comparative performance of the selected zones during the period of study, as it can be seen at a glance from Table-1. Table-1 Comparative analysis of Average means of Fleet held, Fleet operated, Fleet utilization of the selected Zones. Sl.N Key Indicators HYD HYD KRMR NLR KDP VJA VZM o CITY 1 Fleet held No. a) R.T.C 3353.17 2093.1 2827.5 2742.3 2368.1 2601.0 2191.0 7 0 3 7 0 0 b) Hired 171.67 552.67 746.33 495.17 437.50 606.67 535.67 Total 3524.83 2645.8 3573.8 3237.5 2805.6 3207.6 2726.6 3 3 0 7 7 7 http://www.iaeme.com/IJM/index.asp 4 editor@iaeme.com
A Study on Zonal-Wise Comparative Performance of the APSRTC – An Analysis 2 Fleet (operated) No. 3475.17 2610.1 3529.8 3143.1 2719.6 3117.5 2657.5 7 3 7 7 0 0 3 Fleet Utilization % 98.65 98.45 98.57 96.74 96.39 96.67 96.96 4 Kms Operated kms a) R.T.C (inlakh 2928.32 2843.9 4170.9 3833.8 3281.5 3407.0 2938.8 s) 9 5 2 9 7 0 b) Hired 186.45 707.99 996.80 671.28 586.04 810.86 717.32 Total 3114.77 3551.9 5167.7 4505.1 3867.6 4217.9 3656.1 8 5 0 3 3 2 5 Vehicle Utilization kms 242.33 367.83 395.83 381.00 377.50 359.83 366.33 6 Earnings (Traffic) Rs. a) R.T.C (inlakh 67971.26 54897. 79941. 74942. 60349. 65252. 57253. s) 22 67 62 67 17 49 b) Hired 3284.51 12710. 17769. 12093. 11543. 14860. 13270. 09 52 88 90 13 91 Total 71255.77 67607. 97711. 87036. 71893. 80112. 70524. 31 20 50 56 30 40 7 Rate of Earnings. paisa 323.27 279.01 272.89 284.21 274.63 279.10 270.29 (EPK) 8 Earnings/Bus/Day Rs. 5472.83 6973.8 7447.8 7342.6 7013.5 6822.5 7057.3 3 3 7 0 0 3 9 Occupancy Ratio % 70.53 70.60 70.00 71.24 69.72 68.10 67.46 10 Rate of Accidents No. 0.10 0.09 0.10 0.10 0.09 0.09 0.11 11 Rate of B/downs No. 0.13 0.05 0.04 0.08 0.12 0.07 0.10 12 Rate of % 4.41 3.30 3.31 5.00 5.75 5.28 5.18 Cancellations 13 HSD oil KMPL Kms. 4.61 5.30 5.46 5.28 5.18 5.25 5.20 14 LUBoil KMPL Kms. 2248.67 4581.3 7422.3 5533.6 3270.0 4518.3 4296.8 3 3 7 0 3 3 15 Total Tyre Life Kms. 1.77 1.60 1.80 1.78 1.44 1.77 1.87 16 B.S.R (on Held) No. 6.02 5.99 5.99 5.78 5.75 5.67 5.91 17 Crew. Utilization Kms. 96.50 174.83 183.83 174.83 181.83 169.50 166.00 18 Emp. Productivity Kms. 39.33 61.83 66.50 66.00 65.33 63.00 61.00 19 Gross E.P.K Ps 2869.17 2278.0 2153.0 2144.3 2112.8 2211.5 2349.8 0 0 3 3 0 3 20 Gross C.P.K Ps 3013.17 2341.5 2196.6 2266.0 2355.6 2291.8 2476.1 0 7 0 7 3 7 21 Profit/Loss (Lakhs -4484.14 - - - - -954.39 - ) 2195.1 2208.5 4817.4 8497.5 4288.9 5 5 7 9 3 22 Profit Per KM Ps -144.00 -63.50 -43.83 -121.67 -242.67 -80.33 -126.17 Source: Annual Physical performance Reports of the A.P. State Road Transport Corporation http://www.iaeme.com/IJM/index.asp 5 editor@iaeme.com
G.V. Chalam and Dr. Nohmaan Ali 4.2. Comparative analysis of average means values of fleet held, fleet operated, fleet utilization of the selected zones. Table-2 presents the comparative analysis on average mean of fleet held, fleet operated, fleet utilization of select zones from 2008-09 to 2013-14. It can be observed from the data that among the select key indicators, the total number of buses among held the fleet is maximum in KRMR Zone as it is covering the maximum number of regions under it; and routes are very economic and minimum in HYD Zone as HYD City zone is separate leaving it with few regions to cover. The maximum number of buses hired is in VJA zone and minimum HYD city zone whereas maximum number of own fleet is in HYD City zone and minimum in HYD zone. Table 2 Comparative analysis of Average means of Fleet held, Fleet operated, Fleet utilization of selected Zones. Zones Fleet held No. Fleet (operated) No. Fleet Utilization % R.T.C Hired Total HYD CITY 3353.17 171.67 3524.83 3475.17 98.65 HYD 2093.17 552.67 2645.83 2610.17 98.45 KRMR 2827.50 746.33 3573.83 3529.83 98.57 NLR 2742.33 495.17 3237.50 3143.17 96.74 KDP 2368.17 437.50 2805.67 2719.67 96.39 VJA 2601.00 606.67 3207.67 3117.50 96.67 VZM 2191.00 535.67 2726.67 2657.50 96.96 Source: Physical Performance Reports of the A.P. State Road Transport Corporation Maximum Value Minimum Value Table 2 (a) Statistics of Chi-Square Mean Std. Error of Std. Deviation Chi Square Mean Fleet held 3103 380 144 Fleet operated 3036 383 145 χ² =8.689, df= 12 p value is 0.7293 Fleet Utilization 98 1.1 0.43 Source: Computed from the Annual Reports of the A.P. State Road Transport Corporation. Fleet utilization is the percentage of vehicles pressed into service against the total number of vehicles available and held by an organization. This will reveal the efficiency with which the vehicles are treated for mechanical maintenance by following a well-regulated preventive work in order to avoid breakdowns, which reduce the fleet available for operation. The average number of vehicles on road partly represents the additions to vehicles as a result of the efficiency with which the fleet is maintained. The higher the percentage of average number of vehicles on road to the average number of vehicles held by the corporation, the better it is. It means that a higher percentage of buses are available requiring low/no cancellations in services and lower breakdowns etc. The APSRTC has been registering good fleet performance over the decades. The percentage of fleet utilization is maximum in HYD CITY zone and minimum in KDP Zone. Hypothesis H0: Zones and Key Indicators are independent. http://www.iaeme.com/IJM/index.asp 6 editor@iaeme.com
A Study on Zonal-Wise Comparative Performance of the APSRTC – An Analysis Ha: Zones and Key Indicators are not independent. Table 2 (a) shows the results of Chi-Square for the contingency table during period of study. The SEM provides an idea of accuracy of the mean, and Standard deviation provides an idea of the variability of single observation, for the sample. Since the P-value (0.79) is Greater than the significance level (0.05), we can accept the null hypothesis. Thus, we conclude that there is no relationship between Zones and Key Indicators. 4.3. Comparative Analysis of Average Means of Kms Operated and Vehicle Utilization of the Selected Zones. Table-3 presents the comparative analysis on average mean of Kms. operated and Vehicle utilization of select zones from 2008-09 to 2013-14. It can be observed from the data that among the select key indicators, kms. operated is maximum KRMR Zone as it holds the maximum fleet compared to all other zones and minimum in HYD City Zone as fleet held is lowest. Table 3 Comparative analysis of Average means of kilometers Operated and Vehicle utilization of selected Zones. Zones Kms. Operated (in lakhs) Vehicle Utilizations(Kms.) R.T.C Hired Total HYD CITY 2928.32 186.45 3114.77 242.33 HYD 2843.99 707.99 3551.98 367.83 KRMR 4170.95 996.80 5167.75 395.83 NLR 3833.82 671.28 4505.10 381.00 KDP 3281.59 586.04 3867.63 377.50 VJA 3407.07 810.86 4217.93 359.83 VZM 2938.80 717.32 3656.12 366.33 Source: Various Physical Performance Report of the APSRTC. Maximum Value Minimum Value Table 3(a) Statistics of Chi-Square Mean Std. Error of Std. Deviation Chi Square Mean KMS Operated 4012 681 258 χ² =29.3, df= 6 Vehicle Utilization 356 52 19 p value is < 0.0001 Source: Computed from the Annual Reports of the APSRTC. Vehicle utilization is the number of kilometers (kms) served per vehicle operated on the road per day. It represents the operational efficiency of use of the vehicles in terms of effective utilization of vehicles. A vehicle is effectively utilized when it results in more effective kilometers performed by the vehicle on the road. While it is important that maximum number of buses held in the corporation should be on road, it is equally important that they should be run for the maximum number of kilometers possible for the day. Higher vehicle utilization helps in distributing the fixed costs like the cost of personnel, interest on capital etc., over a large number of kilometers thereby reducing the unit cost of operation, which leads to better margins. The percentage of Vehicle Utilization is high in KRMR Zone as it has operated kms, which is more than any other region and minimum in HYD City Zone. http://www.iaeme.com/IJM/index.asp 7 editor@iaeme.com
G.V. Chalam and Dr. Nohmaan Ali Hypothesis H0: Zones and Key Indicators are independent. Ha: Zones and Key Indicators are not independent. Table 3 (a) shows the results of Chi-Square for the contingency table during period of study. The SEM provides an idea of accuracy of the mean, and Standard deviation provides an idea of the variability of single observation, for the sample. Since the P-value (
A Study on Zonal-Wise Comparative Performance of the APSRTC – An Analysis Occupancy ratio is the extent of the actual utilization of bus seat kms. by the passengers. It represents the percentage share of passenger kilometers obtained to seat kilometers offered. Actually, the occupancy ratio is influenced by various factors such as the type of routes (busy/easy), time of operations (morning, noon, evening, night), availability of alternative modes of transport (taxis, auto rickshaws, and rail) etc. In spite of these influences that affect the occupancy ratio, an improvement in the occupancy ratio directly and definitely leads to better revenues and results in better margins with favorable implications on the finances of the organization. Fleet utilization and vehicle utilization are only indicators of improvement in performance, which need not necessarily bring about increase in revenues. But the occupancy ratio has a direct impact on revenues. Percentage of Occupancy Ratio is maximum in NLR Zone and minimum in VZM Zone. Hypothesis H0: Zones and Key Indicators are independent. Ha: Zones and Key Indicators are not independent. Table 4 (a) shows the results of Chi-Square for the contingency table during period of study. The SEM provides an idea of accuracy of the mean, and Standard deviation provides an idea of the variability of single observation, for the sample. Since the P-value is less than the significance level (0.05), we cannot accept the null hypothesis. Thus, we conclude that there is a relationship between Zones and Key Indicators. 4.5. Comparative Analysis of Average Means of Rate of Accidents, Break Downs, Cancellations of Select Zones Table - 5 presents a comparative analysis on average mean of rate of accidents, rate of breakdowns and cancellations. Quality of service needs to be given top priority in providing an efficient, adequate, and economic transport to the public. The quality of service rendered by the organization influences considerably the goodwill it enjoys with the public. Considering the following indicators rate of accidents, rate of breakdowns, cancellations and the evaluation of quality of service is derived. Table 5 Comparative analysis of Average means of rate of Accidents, Break-downs, Cancellations in the selected Zones. Zones Rate of Accidents(No.) Rate of B/downs (No.) Rate of Cancellations % HYD CITY 0.10 0.13 4.41 HYD 0.09 0.05 3.30 KRMR 0.10 0.04 3.31 NLR 0.10 0.08 5.00 KDP 0.09 0.12 5.75 VJA 0.09 0.07 5.28 VZM 0.11 0.10 5.18 Source: Various Physical Performance Report of the APSRTC. Maximum Value Minimum Value Rate of accidents is the evaluation of occurrence of accidents and road fatalities which is an outcome of interplay of a number of factors, which among others include length of road network, vehicle population, human population and adherence/enforcement of road safety regulations. Road users in India are heterogeneous in nature, ranging from pedestrians, animal driven carts, cycles, to multi-axle commercial http://www.iaeme.com/IJM/index.asp 9 editor@iaeme.com
G.V. Chalam and Dr. Nohmaan Ali vehicles etc. Higher exposure to road accident risk may be mitigated by behavioral standards (adherence to road safety regulations) and policy intervention (enforcement). Accidents carry high economic and social costs, which are not easy to measure. Rate of accidents are more in VZM Zone 0.11 per lakh kilometers which is a very good rate but there are other regions which show even lower rate as 0.09 in HYD Zone, KDP Zone, VJA Zone. Breakdown means the stoppage of vehicle on road due to mechanical defects or other failures rendering the bus unfit to operate without attention to it irrespective of the time involved. A breakdown not only leads to passenger discomfort and annoyance but also causes loss of revenue to the organization. The goodwill of Transport Corporation mainly depends upon the non-occurrence of breakdowns. The breakdown rate is the relative measure of breakdowns. The breakdown rate is defined as the number of breakdowns per 10000 effective kilometers. The rate of breakdown (0.13) is more in HYD City Zone and minimum (0.05) in KRMR Zone. Cancellations refer to the cancellation of the scheduled services and are measured in terms of the number of kms cancelled as a percentage of scheduled kms to be operated. The main cause for cancellation of the kms is crew cancelations and mechanical failures. The rate of cancellations is maximum in KDP Zone and minimum in HYD Zone. 4.6. Comparative Analysis of Average Means of HSD oil, LUB Oil, Total Tire Life of the Selected Zones. Table-6 presents the comparative analysis on average mean of HSD oil, LUB oil and total tire life. The efficiency aspect in the areas of fuel consumption is measured with the help of kms operated per liter of HSD oil, which indicates the efficient usage of oil in terms of kms run per liter of HSD oil. The KMPL is calculated by dividing the gross kilometers operated by vehicles by the total HSD oil consumed. Thus the more the kms covered per liter of HSD oil, the higher is the efficiency in the bus usage. KMPL is dependent on many factors both internal and external. Table 6 Comparative analysis of Average means of HSD oil, LUB Oil, Total tire life of the selected Zones Zones HSD oil KMPL Lubi-oil KMPL Total Tire Life Hyd. city 4.62 2256.67 1.78 HYD 5.30 4581.33 1.60 KRMR 5.46 7422.33 1.80 NLR 5.28 5533.67 1.78 KDP 5.18 3270.00 1.44 VJA 5.25 4518.33 1.77 VZM 5.23 4576.50 1.87 Source: Various Physical Performance Report of the APSRTC Maximum Value Minimum Value The internal factors such as the age of the vehicle, condition of the vehicle, maintenance of the vehicle, driving efficiency and habits etc., are directly under the control of the corporation and it can improve its KMPL by having a proper control on these factors, whereas, external factors like road conditions, purity of diesel etc., are outside the control of the corporation. The HSD oil and LUB oil consumption are minimum in HYD City zone maximum and in KRMR Zone. http://www.iaeme.com/IJM/index.asp 10 editor@iaeme.com
A Study on Zonal-Wise Comparative Performance of the APSRTC – An Analysis Tyres form a vital link between the vehicle and the road. The cost of tires occupies second position in the inventory of a transport corporation. Moreover the prices of tires and tubes have been ever increasing which underlines the need to make efforts for prolonging the life of each and every tire and tube. Cost of tires depends on the performance of the tires and re-treadibility factor and the tire performance is measured in terms of life kms. Total tirelife is maximum in VZM Zone and minimum in KDP Zone. 4.7. Comparative Analysis of Average Means of Bus Staff Ratio (BSR), Crew Utilization, Emp. Productivity of Select Zones. Table-6presents the comparative analysis on averages means of BSR, Crew utilizations, employee productivity. Bus staff ratio can be considered as an indicator of manpower utilization, as it helps to understand whether or not the available staff is being systematically and economically employed. It is the ratio of total staff employed on the last day of the specified period to the number of buses on road on the same day. The staff here denotes the total employment in the depot, which includes operating crew, mechanical staff and administrative staff. Since no separate data is maintained for the operation of suburban services, total staff employed by the depot is taken for calculating bus staff ratio. Though a higher ratio denotes more employment generation; it indicates low productivity of the staff employed and higher establishment expenses. Hence, a lower ratio is always desirable as it indicates high productivity of staff employed asit is shown that the percentage of B.S.R is low in VJA Zone and high in HYD City Zone. Similarly Crew utilizations and Employee productivity is maximum in KRMR Zone and minimum in HYD City Zone. Table 7 Comparative analysis of Average means of Bus Staff ratio, Crew Utilization, Employee Productivity of the selected Zones. Zones BSR (%) Crew. Utilization (kms) Emp. Productivity (kms) Hyd. city 6.01 96.33 39.33 HYD 5.99 174.83 61.83 KRMR 5.99 183.83 66.50 NLR 5.78 174.83 66.00 KDP 5.75 181.83 65.33 VJA 5.67 169.50 63.00 VZM 5.99 164.33 60.17 Source: Various Physical Performance Report of the APSRTC. Maximum Value Minimum Value 4.8. Comparative Analysis of Average Means of EPK, CPK, Profit/Loss, Profit per Km of Select Zones. Table-8 presents the comparative analysis on average mean of Gross EPK, CPK and Profit/loss per Km. of the selected zones. Profitability is considered as the index of the best utilization of resources in view of the fact that profit is the net result of the total operations during a particular period. When the economy is booming with a visible increase in the number of people travelling, the APSRTC is facing a very dismal and grim situation. It is necessary, under the circumstances, to study the factors that are responsible for the turnout of a profit-making unit into a loss making unit. The gap between revenue and cost has been continuously increasing; resulting in mounting losses to the corporation thus we can see them across the zones. http://www.iaeme.com/IJM/index.asp 11 editor@iaeme.com
G.V. Chalam and Dr. Nohmaan Ali Table 8 Comparative analysis of Average means of EPK, CPK, Profit/loss, Profit per Km of the selected Zones. Zones Gross EPK (ps) Gross C.P.K (ps) Profit/Loss (lakhs) Profit Per Km (ps) HYDCity 2869.17 3013.17 -4484.14 -144.00 HYD 2278.00 2341.50 -2195.15 -63.50 KRMR 2153.00 2196.67 -2208.55 -43.83 NLR 2144.33 2266.00 -4817.47 -121.67 KDP 2112.83 2355.67 -8497.59 -242.67 VJA 2211.50 2291.83 -2954.39 -80.33 VZM 2349.83 2476.17 -4288.93 -126.17 Source: Various Physical Performance Report of the APSRTC Maximum Value Minimum Value Table 8 (a) Statistics of Chi-Square Mean Std. Error of Mean Std. Deviation Chi Square Gross E.P.K 2303 263.1 99.45 χ² =3238, df= 18 Gross C.P.K 2420 275.3 104.1 p value is< 0.0001 Profit/Loss 4207 2179 823.4 Profit Per Km 117.6 66.1 24.98 Source: Computed from the Annual Reports the APSRTC. The gross earnings per kilometer are more in HYD City zone and low in KDP Zone. The gross cost per kilometer is Maximum in HYD City and minimum in KRMR zone. As APSRTC is in loss maximum loss incurred in KDP zone, which is not performing, and minimum loss incurred in KRMR zone. Profit per Kilometer cannot be obtained as there is loss it was maximum in KDP zone and minimum in KRMR zone. Hypothesis H0: Zones and Key Indicators are independent. Ha: Zones and Key Indicators are not independent. Table-8 (a) shows the results of Chi-Square for the contingency table during period of study. The SEM provides an idea of accuracy of the mean, and Standard deviation provides an idea of the variability of single observation, for the sample. Since the P-value is less than the significance level (0.05), we cannot accept the null hypothesis. Thus, it can be concluded that there is a relationship between zones and key Indicators. 5. CONCLUSION The analysis on the Zone-wise performance of the APSRTC is seen from the foregoing analysis, which reveals the following conclusions. • The fleet utilization, which was 98.65 per cent in HYD City Zone alone, speaks the operational efficiency of the organization. The highest fleet utilization reveals that the corporation has employed the optimum fleet to meet the traffic demands. But the surprising fact is that even though the zone was able to achieve the peak in fleet utilization, the analysis of the fleet held reveals that there was only a negligible increase in the fleet held, to the extent of 0.98%. The growth of population and residential areas necessitates the addition of more buses. http://www.iaeme.com/IJM/index.asp 12 editor@iaeme.com
A Study on Zonal-Wise Comparative Performance of the APSRTC – An Analysis • The vehicle being the most important resources available to the corporation and its utilization measured in terms of the kilometers obtained per vehicle per day, determines to a larger extent the efficiency of the organization. The higher vehicle utilization helps in distributing the fixed costs over a large number of kilometers and thereby reduces the unit cost of operation and helps in improving margins. The APSRTC has been successful in improving the vehicle utilization from 395Kms in KRMR Zone. • The occupancy ratio is one area which needs to be addressed in a comprehensive manner, though it is 70.60% in HYD Zone as acceptable standard of occupancy ratio is 75%. The Zones have succeeded to a great extent in reducing the bus staff ratio to 5.75in KDP Zone. For this it has taken various measures such as the introduction of Ticket Issuing Machines, one man operated services, and outsourcing of crew. The recommendation of IIM-Bangalore to reduce the bus staff ratio to 5.40 can be realized by the corporation within a few years if it adopts the measures without any opposition from Trade Unions. • The Zones performed to their best in the conservation of fuel due to good condition of roads, purity of diesel etc. Even though there is a fluctuating trend, it was not able to improve its kmpl from 5.46in KRMR Zone to 4.16Hyd City Zone due to traffic conditions. Even though fuel efficiency depends upon many factors, the appointment of contract drivers and outsourcing of maintenance activities also contributed to the decline in its efficiency. • The same trend can be observed in the case of tire life also. The tire life has varied from 144 thousand kms in KDP Zone to 187 thousand kms in VZM Zone because of the sophisticated technology in the manufacture of tires and better tire maintenance. The improvement was not commendable in light of the standard of 185 thousand kms. As the Zones resorted to outsourcing of maintenance activities, there was decline due to the improper preventive maintenance practices that lead to more scrapping of tires and the consequent reduction in tire life. • The Zones have taken rigorous steps n improving the quality of service and thereby reducing the accidents, breakdowns and cancellations. This has helped them in improving the image of the corporation. The zones have shown a satisfactory performance in reducing accident rate to 0.09 in HYD, KDP, and VJA Zones. Similarly it succeeded in reducing breakdowns and cancellations to a great extent. The gross EPK is 2869.17 in HYD City Zone which is high of all the zones though Gross CPK is 2196.67 least in KRMR Zone which is higher than the earnings per km. Thus, loss is occurring across all the zones with minimum loss in KRMR Zone. REFERENCE [1] Agarwal. R.S. “Impact of Government Policies on Commercial viability of State Road Transport Undertakings”, The Management Accountant, March, 2003. [2] Allen.J.E., “Covering the Cost of Public Transport”, Journal of Transport Management, January, 1980. [3] Anbalagan.V, Kumar R.B & Nallusamy.S, “Performance Evaluation of Metropolitan Transport Corporations in India”, Indian Journal of Transport Management, April-June 2007. [4] Bagade, M.V., “Key Result Areas for Cost Control in STUs”, Indian Journal of Transport Management, January 1999. [5] Baveja G.C., “Problems of Passenger Road Transport”, State Transport News, January, 1972. [6] Ghosh. S.K., “Managerial Performance Appraisal System for STUs A New Approach”, Indian Journal of Transport Management, December 1997. [7] Krishnamurthy, V.A., “Andhra Pradesh Road Transport – A Case study”, Transport, Vol. 19, No.18, August, 1969. [8] Kulshrestha D.K., Management of State Road Transports in India, Mittal Publications, New Delhi, 1989. http://www.iaeme.com/IJM/index.asp 13 editor@iaeme.com
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A Study on Zonal-Wise Comparative Performance of the APSRTC – An Analysis [29] Theng K.D. &Kuthe R.M, “Factors Affecting Fuel Economy in STUs,” Journal of Transport Management, November, 1987. [30] Walters, A.A., “Costs and Scale of Bus Services”, World Bank Staff Working Paper, No. 325, World Bank, Washington D.C., April 1979. [31] Harshit Eric Williams and Dr. Devaraj Badugu, To Adjudicate Corporate Social Responsibility Activities and Its Impact on Operational Performance of Indian Banks. International Journal of Management (IJM), 7(5), 2016, pp. 84–105. [32] Vasantharayalu and Dr. Surajit Pal, An Empirical Study of Total Quality Management (TQM) Practices on Operational Performance of Indian Manufacturing and Service Firms. International Journal of Management (IJM), 7(6), 2016, pp. 192–202. http://www.iaeme.com/IJM/index.asp 15 editor@iaeme.com