Demo Field Service & Mobile Operations (DFSMO)
Evaluating the Cost of Serving Farther Customers
Read Time: 5–7 minutes
Published October 2026
About This Sample
This sample demonstrates how OAI may approach a business inquiry using DFSMO, a fictional company modeled on operating characteristics commonly found in field-service, mobile operations, and contracting businesses. The analysis is illustrative rather than empirical, and its figures are conceptual unless otherwise noted.
How This Sample Is Structured
This sample follows a business question from the initial concern through the information needed to evaluate possible responses.
Business Context → Practical Problem → Research Question → Investigation → Possible Responses
The investigation begins by defining how DFSMO operates and why customer location has become a concern. It then identifies what must be understood about the effect of travel before comparing three possible responses:
adjusting pricing
acquiring more nearby work
serving farther markets differently
The purpose is not to assume which response is correct, but to show how a broad business concern can be narrowed into questions that can be investigated and compared.
How DFSMO Serves Customers
DFSMO represents businesses that send employees or crews from an operating base to customer locations. Work may be completed at one customer location before returning to base, or across several customer locations before returning.
Work Performed at One Customer Location Before Returning to Base
Base → Crew / Technician → Customer Site → Work Performed → Base
Work Performed Across Several Customer Locations Before Returning to Base
Base → Customer Site → Work Performed → Customer Site → Work Performed → Customer Site → Work Performed → Base
DFSMO primarily operates using the first structure. Because this investigation focuses on how customer location affects the time and cost required to complete work, the same general logic also applies to the second structure. Multi-stop work, however, would typically be evaluated at the route level rather than treating each customer visit as a separate round trip.
The Question Facing DFSMO
As DFSMO serves customers farther from its operating base, management has noticed that some projects appear less attractive than similar work nearby. It is unclear how the company should respond.
Turning away farther customers could mean giving up worthwhile work. Continuing to serve every project the same way may require more time and cost. Adjusting prices, focusing on closer customers, changing how farther areas are served, or eventually establishing another operating location could each make sense under different conditions.
Practical Problem
DFSMO needs to decide how farther projects should be handled without unnecessarily giving up worthwhile work or absorbing costs that make those projects less attractive.
Research Problem
DFSMO does not yet know when serving customers farther from the operating base materially changes the time and cost required to complete a project, or when those effects become large enough to justify a different response.
Without understanding that relationship, DFSMO cannot tell whether pricing, customer acquisition, or a different operating approach is the more appropriate response.
Research Questions
How does serving customers farther from the operating base change the travel time, employee time, and direct cost required to complete a project?
And, when those effects become significant:
What response becomes worth considering?
Beginning the Investigation
A farther project may still be worthwhile even if it requires more travel. The investigation therefore begins by separating the project itself from the travel required to complete it.
Project Margin Before Travel
Before accounting for travel, DFSMO looks at the margin produced by the project itself.
Project Revenue − Direct Project Cost = Project Margin Before Travel
This margin provides a baseline for measuring the effect of customer location.
Travel Spent per Project
A project may require several trips before the work is complete, so distance alone does not show the full travel requirement.
Round-Trip Travel Time: travel required for each visit
Required Site Visits: how many times that trip occurs
Round-Trip Travel Time × Required Site Visits = Travel Spent per Project
A moderately distant project requiring several visits may require more travel than a farther project completed in a single visit.
Project A
Moderate Distance × Several Site Visits → More Travel
Project B
Farther Distance × One Site Visit → Less Travel
Employee Time and Direct Travel Cost
To measure the effect of travel, DFSMO may also need:
Traveling Crew Size: how many employees make the trip
Loaded Hourly Labor Cost: the hourly cost of employee time, including wages and applicable employer costs
Direct Travel Cost: fuel, tolls, mileage, vehicle expense, or other costs created by serving the location
Travel Spent per Project × Traveling Crew Size = Crew-Hours Spent Traveling
Crew-Hours Spent Traveling × Loaded Hourly Labor Cost = Travel Labor Cost
Travel Labor Cost + Direct Travel Cost = Additional Dollar Cost to Serve
For this comparison, direct project cost excludes the travel-related labor and vehicle costs measured separately here.
Figure 1 — Effect of Travel
These measures can then be considered alongside the project margin before travel when comparing possible responses.
Comparing Possible Responses
Branch 1 — Can Pricing Offset the Added Cost?
Once the additional dollar cost of serving a farther project is known, DFSMO can examine whether pricing can absorb it.
To preserve the same project margin, the quoted price would need to increase by the amount of that added cost, assuming the rest of the project remains unchanged.
Additional Dollar Cost to Serve = Required Price Increase to Preserve Margin
As serving farther locations requires larger price adjustments, customer acceptance becomes increasingly relevant.
How does customer acceptance change as price changes?
Examining that relationship may require:
quoted price
customer location
quotes accepted
quotes declined
Figure 2 — Price vs. Customer Acceptance
If DFSMO can recover the added cost without meaningfully changing customer acceptance, pricing may be worth exploring further.
As higher prices reduce customer acceptance enough to offset the margin being recovered, pricing becomes less attractive as a response.
Branch 2 — Would Acquiring Nearby Work Cost Less?
A farther project may still be profitable, but the added cost of serving it creates another comparison:
Added Dollar Cost of Serving Farther Work
vs.
Expected Cost of Acquiring Similar Nearby Work
Examining that comparison may require:
customer acquisition spending
nearby projects won
Customer Acquisition Spending ÷ Nearby Projects Won = Expected Acquisition Cost per Won Project
The comparison is most useful when the nearby and farther projects are reasonably similar in scope, value, and margin potential.
Figure 3 — Farther Service vs. Nearby Acquisition
As the added cost of serving farther projects approaches or exceeds the expected cost of acquiring similar work nearby, nearby customer acquisition becomes increasingly relevant.
Branch 3 — Does the Farther Market Justify a Different Approach?
Farther projects may form part of a larger market rather than a collection of isolated jobs. DFSMO can therefore examine whether enough activity exists in the farther area to justify serving it differently.
The question is whether serving that concentration differently could reduce enough travel or support enough recurring work to justify the added operating cost.
Useful indicators may include:
repeat customers
multiple customers within the same area
amount of work generated by the area
Figure 4 — Customer Activity by Area
As customer activity becomes more concentrated in a farther area, DFSMO can compare the cost of continuing to serve that market from the existing base with alternatives such as routing, territory scheduling, dedicated crews, or another operating location.
Paths for Further Investigation
The initial question about customer location now separates into three broader paths:
pricing and customer acceptance
acquiring more work closer to the operating base
serving farther markets differently
Which path deserves deeper investigation depends on the patterns DFSMO actually encounters. If requested, any of these paths can be explored in greater detail.
Conclusion
DFSMO began with a broad concern: some farther projects appeared less attractive than similar work nearby. The analysis shows why distance alone is not enough to evaluate a project.
What matters is the travel required across the project, the employee time and direct cost created by that travel, and how those effects compare with the margin produced by the work.
Separating those factors turns a general concern about customer location into clearer decisions around pricing, customer acquisition, and how different markets are served.