COST CENTERS: A NEW APPROACH TO TRANSIT PERFORMANCE

This article illustrates a "cost center" approach to a route by route evaluation of the Mercer Metro System (Trenton, New Jersey). In this approach, each route is treated as a separate operating entity; for each route, revenue, cost and the resulting margin are determined to assess the relative "profitability" of each transit line. Costs are determined using a three-variable cost allocation model. Based on this cost/revenue analysis, the routes are ranked and clustered into four performance quartiles; those in the first quartile require little or no change, while those in the last are candidates for elimination or substantial revision. The author stresses that priorities related to route revision should be related not only to operating ratio but also to the relative volume of service generated; financial evaluation of transit routes should be tempered with the social value of the service.

• Corporate Authors:

  American Public Transit Association

  1225 Connecticut Avenue, NW
  Washington, DC  United States  20036
• Authors:
  • Cherwony, W
• Publication Date: 1977

Media Info

• Pagination: p. 70-80
• Serial:
  • Transit Journal
  • Volume: 3
  • Issue Number: 4

Subject/Index Terms

• TRT Terms: Cost accounting; Cost allocation; Mathematical models; Performance; Performance evaluations; Profitability; Public transit; Revenues; Route choice
• Uncontrolled Terms: Performance indicators
• Geographic Terms: Trenton (New Jersey)
• Old TRIS Terms: Cost centers
• Subject Areas: Finance; Planning and Forecasting; Public Transportation;

Filing Info

• Accession Number: 00376947
• Record Type: Publication
• Files: TRIS
• Created Date: Aug 30 1983 12:00AM