Answered: A Southern Georgia school district is…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Question

A Southern Georgia school district is considering ordering
53 propane-fueled school buses. "They're healthier, they're
cleaner burning, and they're much quieter than the diesel option,"
said a school administrator. Propane-powered buses also reduce
greenhouse gases by 22% compared to gasoline-powered buses and
6% compared to diesel ones. But they come at a premium- $) 03,000
for a propane model, $15,000 more than the diesel equivalent.
The propane bus operating cost (above and beyond fuel cost)
is 30 cents/mile, compared to 40 cents for the diesel. Diesel fuel
costs about $2/gallon in Georgia, about $1 more than propane.
Bus mileage is 12 mpg for the propane model vs. 10 mpg for diesel.
The life of a school bus in the district averages 9 years, and
each bus travels an average of 30,000 miles per year because the
district is so large and rural.
Which bus is the better choice based on a life cycle analysis?

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