A Southern Georgia school district is considering ordering 58 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 25% compared to gasoline-powered buses and 8% compared to diesel ones. But they come at a premium—$97,000 for a propane model, $17,000 more than the diesel equivalent. The propane bus operating cost (above and beyond fuel cost) is 40 cents/mile, compared to 49 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. 7 mpg for diesel. The life of a school bus in the district averages 10 years, and each bus travels an average of 34,000 miles per year because the district is so large and rural. Which bus is the better choice based on a life-cycle analysis?
A Southern Georgia school district is considering ordering 58 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 25% compared to gasoline-powered buses and 8% compared to diesel ones. But they come at a premium—$97,000 for a propane model, $17,000 more than the diesel equivalent. The propane bus operating cost (above and beyond fuel cost) is 40 cents/mile, compared to 49 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. 7 mpg for diesel. The life of a school bus in the district averages 10 years, and each bus travels an average of 34,000 miles per year because the district is so large and rural. Which bus is the better choice based on a life-cycle analysis?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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A Southern Georgia school district is considering ordering 58 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 25% compared to gasoline-powered buses and 8% compared to diesel ones. But they come at a premium—$97,000 for a propane model, $17,000
more than the diesel equivalent.
more than the diesel equivalent.
The propane bus operating cost (above and beyond fuel cost) is 40 cents/mile, compared to 49
cents for the diesel. Diesel fuel costs about $4/gallon in Georgia, about $1 more than propane. Bus mileage is
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. 7 mpg for diesel. The life of a school bus in the district averages
10 years, and each bus travels an average of 34,000 miles per year because the district is so large and rural. Which bus is the better choice based on a life-cycle analysis?
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.
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