Ask Question
19 July, 07:56

The Universal Postal Service is considering the possibility of fixing wind deflectors on the tops of 500 of their long-haul tractors. Three types of deflectors, with the following characteristics, are being considered (MARRequals=99 % per year) : Windshear Blowby Air-vantage Capital investment $700700 $500500 $1 comma 3001,300 Drag reduction 1616 % 88 % 2424 % Maintenance per year $1111 $55 $44 Useful life 99 years 1212 years 55 years If 44 % in drag reduction means 33 % in fuel savings per mile, how many miles do the tractors have to be driven per year before the windshear deflector is favored over the other deflectors? Over what range of miles driven per year is air-vantage the best choice? (Note: Fuel cost is expected to be $3.003.00 per gallon, and average fuel consumption is 55 miles per gallon without the deflectors.)

+4
Answers (1)
  1. 19 July, 10:00
    0
    The annual operating expenses of long-haul tractors equipped with the various deflectors are calculated as a function of mileage dirven per year, X

    Annual Operating Expenses = X miles/Year x Possibility with drag reduction x fuel savings x $3 per gallon

    Possibility with Drag reduction

    Windshear = 1 - (2%/5%) x 15% 0.94

    Blowby = 1 - (2%/5%) x 10% 0.96

    Air Vantage = 1 - (2%/5%) x 20% 0.92

    Windshear: [ (X miles/yr) (0.94) (0.25 gallon/miles) ($3.00/gal) ] = 0.705 x/yr

    Blowby: [ (X miles/yr) (0.96) (0.25 gallon/mile) ($3.00/gal) ] = 0.72 x/yr

    Air-vantage: [ (X mi/yr) (0.92) (0.25 gal/mi) ($3.00/gal) ] = 0.69 x/yr

    EUAC can now be written in terms of X

    EUAC Windshear = $800 (A/P, 12,%; 8) + $9 + $0.705X = $170.04 + $0.705X

    EUAC Blowby = $500 (A/P, 12,%; 9) + $6 + $0.72X = $99.85 + $0.72X

    EUAC Air Vantage = $1200 (A/P, 12,%; 6) + $6 + $0.69X = $297.84 + $0.69X

    The breakeven values can be computed between each pair of deflectors by equating their EUAC equations and solving for X

    Windshear and Blowby: = $170.04 + $0.705 x = $99.85 + $0.72X/yr $4,679.33 miles per year

    Blowby and Air-vantage = $99.85 + $0.72x = $297.84 + 0.69X $6,599.67 miles per year

    Air-vantage and Windshear = $297.84 +.69x = $170.04 + 0.705x $8,520 miles per year

    Determine the range over which each deflector is preferred

    x< $4,679.33 select blowby

    $4,679.33
    $8,520
    Gallon per miles = 1/4 miles 0.25
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “The Universal Postal Service is considering the possibility of fixing wind deflectors on the tops of 500 of their long-haul tractors. Three ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers