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Application of Logistic Regression to Analyze The Economic Efficiency of Vehicle Operation in Terms of the Financial Security of Enterprises

Author

Listed:
  • Malgorzata Grzelak

    (Faculty of Security, Logistics and Management, Military University of Technology, 00-908 Warsaw, Poland)

  • Paulina Owczarek

    (Faculty of Security, Logistics and Management, Military University of Technology, 00-908 Warsaw, Poland)

  • Ramona-Monica Stoica

    (Faculty of Aircraft and Military Vehicles, Military Technical Academy “Ferdinand I”, 050141 Bucharest, Romania)

  • Daniela Voicu

    (Faculty of Aircraft and Military Vehicles, Military Technical Academy “Ferdinand I”, 050141 Bucharest, Romania)

  • Radu Vilău

    (Faculty of Aircraft and Military Vehicles, Military Technical Academy “Ferdinand I”, 050141 Bucharest, Romania)

Abstract

Background : A measurable feature of the efficiency of vehicle use in transportation companies is the revenue from transport orders, which has a significant impact on their profitability. Therefore, it is important to skillfully analyze the parameters related to the operation of vehicles and their impact on the bottom line. Transportation companies, when managing their operations, take steps to reduce operating costs. The above makes a large number of studies available in the literature on the analysis of vehicle damage or wear of system components, as well as ways to predict them. However, there is a lack of studies treating the impact of the parameters of specific orders on economic efficiency, which is a research niche undertaken in the following study. Methods : The purpose of this article was to analyze the economic efficiency of vehicle operation in terms of the financial security of enterprises. The main research problem was formulated in the form of the question of how the various parameters of a transport order affect its profitability. During our study, critical analysis of the literature, mathematical modeling and inference were used. A detailed analysis of transport orders executed by SMEs (small and medium-sized enterprises), which are characterized by a fleet of light commercial vehicles with a capacity of up to 3.5 t, was carried out in the FMCG (Fast-Moving Consumer Good) industry in Poland in 2021–2022. Due to the binary variable form, a logistic regression model was elaborated. The estimated parameters of the model and the calculated odds ratios made it possible to assess the influence of the selected factors on the profitability of orders. Results : Among other things, it was shown that in the case of daily vehicle mileage, the odds quotient indicates that with each additional kilometer driven, the probability of profitability of an order increases by 1%. Taking into account the speed of travel, it is estimated that with an increase in its value by 1 km/h, the probability of profitability of an order decreases by 3%. On the other hand, an increase in cargo weight by 1 kg makes the probability of a profitable order increase by 9%. Conclusion : Through this study, the limited availability of low-cost analytical tools that can be applied during transportation fleet management in SME companies was confirmed, as was the use of simple and non-expansive mathematical models. At the same time, they are not “black boxes” and therefore enable drawing and implementing model conclusions into operations. The results obtained can help shape the overall strategy of companies in the area of vehicle operation and can support the decision-making process related to the management of subsequent orders, indicating those that will bring the highest profit. The above is very important for SME companies, which often operate on the verge of profitability.

Suggested Citation

  • Malgorzata Grzelak & Paulina Owczarek & Ramona-Monica Stoica & Daniela Voicu & Radu Vilău, 2024. "Application of Logistic Regression to Analyze The Economic Efficiency of Vehicle Operation in Terms of the Financial Security of Enterprises," Logistics, MDPI, vol. 8(2), pages 1-14, May.
  • Handle: RePEc:gam:jlogis:v:8:y:2024:i:2:p:46-:d:1387477
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    References listed on IDEAS

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    1. Ram D. Joshi & Chandra K. Dhakal, 2021. "Predicting Type 2 Diabetes Using Logistic Regression and Machine Learning Approaches," IJERPH, MDPI, vol. 18(14), pages 1-17, July.
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