GaNoline 7 years Electrical Power LPG Diesel Fuel Life expectancy 7 years $30,000 7 years $21,000 7 years Initial cost $20,000 $25,000 Salvage value Maximum shifts per year $3,000 $2,000 $2,000 $2,200 260 260 260 260 Fuel consumption/shift 32 kWh 12 gal 11 gal 7 gal Fuel cost/unit $0.20/kWh $3.15/gal $3.60/gal $3.95/gal Fuel cost/shift $6.40 $3780 $39.60 $2765 Annual maintenance cost: Fixed cost $500 $1,000 $1,200 $1,500 Variable cost/shift $5 $7 $9
A local U.S. Postal Service office is considering purchasing a 4,000 lb forklift truck, which will be used primarily for processing incoming as well as outgoing postal packages. Forklift trucks traditionally have been fueled by either gasoline, liquid propane gas (LPG), or diesel fuel. Battery-powered electric forklifts, however, arc increasingly popular in many industrial sectors because of their economic and environmental benefits. Therefore, the Postal Service is interested in comparing the four different types of forklifts. Purchase costs as well as annual operating and maintenance costs for each type of forklift are provided by a local utility company. Annual fuel and maintenance costs are measured in terms of number of shifts per year, where one shift is equivalent to eight hours of operation. A comparison of the variables of the four forklift types is given in the following table:
The Postal Service is unsure of the number of shifts per year, but it expects them to be somewhere between 200 and 260 shifts. Since the U.S. Postal Service does not pay income taxes, no
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