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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A Southern Georgia school district is considering ordering

57 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 gasses by

24% compared to gasoline-powered buses and

7% compared to diesel ones. But they come at a premium—$105,000

for a propane model,

$10,000

more than the diesel equivalent.

The propane bus operating cost (above and beyond fuel cost) is

35 cents/mile, compared to

45 cents for the diesel. Diesel fuel costs about

$4/gallon

in Georgia, about $1 more than propane. Bus mileage is

9 mpg for the propane model vs.

8 mpg for diesel. The life of a school bus in the district averages

11 years, and each bus travels an average of

37,000 miles per year because the district is so large and rural. Which bus is the better choice based on a life-cycle analysis?

Calculate the fuel cost for the propane-fueled bus.

Use the obtained value to calculate the total cost of using the propane-fueled bus during its life period.

Calculate the price of the diesel-fueled bus.

Use the obtained value to calculate the total cost of using the diesel-fueled bus during its life period.

Which bus is the better choice based on a life-cycle analysis.

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