STRATEGIC FLEET MANAGEMENT

(1)

STRATEGIC FLEET

MANAGEMENT

STRATEGIC FLEET

MANAGEMENT

Shanghai, China

September 4

-

5, 2008

(2)

1 Course Schedule

Course Schedule

–

Day 1

Paul/Mark

11:30 – 12:00

Key Trends in Fleet Management

Introductions and Discussion of Course

Objectives

8:30 – 9:00 Paul

Elements of an Effective Fleet Management

Program

9:00 – 10:30 Mark/Paul

Break

10:30 – 10:45

Elements of an Effective Fleet Management

Program (continued)

10:45 – 11:30 Paul/Mark

Lunch

12:00 – 1:00

Computerized Fleet Management Systems

and Analytical Tools

1:00 – 2:30 Mark

Break

2:30 – 2:45

Performance Measurement/ Benchmarking

2:45 – 4:00 Paul

Supplier Management

4:00 – 5:00 Paul

(3)

2 Course Schedule

Course Schedule

–

Day 2

Managing Fleet Size, Composition, and

Utilization

8:30 – 9:00

Paul

Fleet Analytics

9:00 – 10:00

Mark

Break

10:00 – 10:15

Determining Optimal Vehicle Replacement

Cycles

10:15 – 11:00

Paul

Alternative Approaches for Financing

Vehicle Acquisitions

11:00 – 11:30

Paul

Developing a Business Case for Fleet

Replacement and Renewal

11:30 – 12:00

Paul

Lunch

12:00 – 1:00

Developing a Fleet Management Business

Plan

1:00 – 2:15

Paul

Break

2:15 – 2:30

Business Plan Group Exercise

2:30 – 3:30

Paul

Fleet Professionalism in China

3:30 – 4:30

Mark

(4)

3 Keys to the Success of this Course for You

Keys to the Success of this Course for You

z

Think about the relevance of the concepts,

strategies, and techniques presented here to your

organization – no matter how large or small, or how

experienced in or new to the realm of professional

fleet management

z

Think about who in your organization needs to

understand and support the elements of an effective

fleet management program

z

Participate – ask questions, share experiences and

(5)

ELEMENTS OF AN

EFFECTIVE FLEET

MANAGEMENT

PROGRAM

(6)

5 Fleet Architecture

Fleet Architecture

(7)

6 Business Process Models

Business Process Models

(8)

7 Fleet Management Modeling

Fleet Management Modeling

(9)

8 Business Logic Investigation

Business Logic Investigation

(10)

9 Transport Decision Environment

Transport Decision Environment

(11)

10 Transport Technology Project Plan

Transport Technology Project Plan

(12)

11 Fleet Lease Systems Architecture

Fleet Lease Systems Architecture

(13)

12 Fleet System Improvement Plan

Fleet System Improvement Plan

(14)

13 Fleet Planning Model Design

Fleet Planning Model Design

(15)

14 Fleet Planning Design

Fleet Planning Design

(16)

15 Vehicle Emissions Reduction

Vehicle Emissions Reduction

(17)

16 Common Misconceptions About Fleet

Common Misconceptions About Fleet

Management

z

Fleet management is not important

z

Fleet management is not complicated

(18)

17 Why is fleet management (thought to be) not

Why is fleet management (thought to be) not

important?

z

The fleet operation often is a cost, not a revenue or profit,

producer

z

Fleet management usually is an internal support (“back

office”) function whose immediate customers are fellow

employees

z

Fleet costs are often small in relative, enterprise-wide

terms, even if large in absolute terms

z

The contribution of the fleet (and, hence, fleet management)

to the fulfillment of enterprise-wide mission(s) often is not

clear or well understood

(19)

18 Why is fleet management important?

Why is fleet management important?

z

Customer service

z

Customer confidence

z

Organization image

z

Employee productivity

z

Employee efficiency

z

Employee safety

z

Public safety

z

Cost control

z

Regulatory compliance

(20)

19 What

What

’

s so complicated about managing a

fleet?

Fleet management involves performing two

distinct but interdependent types of activities:

z

Asset Management

(21)

20 Vehicle

Assignment

Vehicle

Operation

Vehicle

Utilization

Control

Mechanic

Supervision

Licensing &

Titling

Routing &

Scheduling

Vehicle Maintenance

& Repair

Replacement

Planning

Outsourcing

Mileage

Reimbursement

Accident

Management

Parts

Procurement & Supply

Bulk Fuel

Procurement &

Dispensing

Dispatching

Fuel Card

Management

Vehicle

Acquisition

Motor Pool

Management

Vehicle

Disposal

Operator/Driver

Training

Sound Vehicle

Performance

Asset Management Processes

Vehicle

Specification/

(22)

21 Business

Planning

Customer

Relationship

Management

Personnel

Management

Sourcing/

Purchasing

Budgeting

Information

Systems

Professional

Certification

Cost Analysis

& Control

Management

Analysis

Performance

Measurement &

Benchmarking

Service Level

Agreements

Management

Reporting

Charge-Back

Rate Development

Performance

Reviews

Risk

Management

_Training

Billing &

Collections

Contract

Management

Customer

Surveys

Fund

Management

& Accounting

Sound

Fleet

Management

Enterprise Management Processes

(23)

22 Enterprise Management Activities that Can

Enterprise Management Activities that Can

Have a Big Impact on Fleet Management

Practices

z

Budgeting

z

Finance and Accounting

z

Asset Management

z

Sourcing

Procurement

Supplier Management and Payment

z

Human Resources Management

z

Information Technology Management

z

Risk Management

(24)

23 How do you know if you have an effective

How do you know if you have an effective

fleet management program?

Low

Quality

High

Cost

Low

Cost

9

9 x

(25)

24 An Effective Fleet Management Program

An Effective Fleet Management Program

Furnishes Assets that are...

1. Suitable

2. Available

3. Reliable

4. Safe

5. Economical

6. Eco-friendly

(26)

25 A Few Questions About Fleet Management

A Few Questions About Fleet Management

Practices in Your Organization

z

Do we have a designated fleet manager?

z

If not, who manages the fleet?

z

Where did they acquire their fleet management

expertise?

z

What else do they manage (if anything)?

z

Do we have a fleet capital and/or operating budget?

z

Documented fleet management policies and

procedures?

z

A fleet management information system?

(27)

26 A Few More Questions

A Few More Questions

z

Do we have the right number of vehicles and pieces

of equipment in our fleet?

z

Is this number growing? Shrinking?

z

Do we have the right types of vehicles?

z

Are they reliable?

z

Are they safe to operate?

z

Are they safely operated?

z

Do they comply with applicable rules and

(28)

27 Some Final Questions

Some Final Questions

z

How much do we spend on our fleet?

z

Are these expenditures increasing or decreasing?

z

Are they reasonable?

z

Who is accountable for them?

z

Can we reduce them?

z

Which ones? How?

z

Will cost reductions affect fleet performance?

(29)

28 Key Fleet Management Functions

Key Fleet Management Functions

Vehicle Assignment

z

Vehicle acquisition justification

z

Acquisition alternatives analysis and decision making

Vehicle Acquisition and Disposal

z

Vehicle specifications development and selection

z

Purchase contract establishment and management

z

Vehicle upfitting and in-servicing

z

Commercial vehicle rental

z

Vehicle remarketing/disposal

Vehicle Operation Management

z

Operator licensing and certification

z

Operator training

z

Pre-/post-trip inspection and record keeping

z

Vehicle misuse/abuse management

z

Accident repair and claims management

z

Fleet safety management

(30)

29 Key Fleet Management Functions

Key Fleet Management Functions

Vehicle Utilization Management

z

Vehicle utilization guidelines

z

Routing, scheduling, and dispatching management

z

Vehicle utilization data capture

z

Investigation of utilization "anomalies"

z

Vehicle reassignment or disposal

Vehicle Maintenance and Repair

z

Pre-/post-trip inspection and defect reporting

z

Preventive maintenance programs

z

Work planning and scheduling

z

Service writing and job assignment

z

Maintenance and repair service delivery

z

Mechanic supervision

z

Road call management

z

Field service management

z

Warranty management

(31)

30 Key Fleet Management Functions

Key Fleet Management Functions

Fleet Maintenance Services Supplier Management

z

Outsourcing v. insourcing determination

z

Vendor certification / pre-qualification

z

Contract establishment and management

z

Service authorization

z

Vendor performance management

Fleet Maintenance Parts Provisioning

z

Contract establishment and management

z

Ad hoc purchasing

z

Inventory management and control

z

Parts disbursement

Fleet Fueling

z

Contract establishment and management

z

Bulk fuel inventory management and control

z

Bulk fuel facility operation and maintenance

z

Commercial fuel card program management

(32)

31 Key Fleet Management Functions

Key Fleet Management Functions

Fleet Replacement

z

Replacement criteria development

z

Replacement planning

z

Vehicle condition assessment and replacement budgeting

z

Vehicle capital financing alternatives

z

Replacement funding levels

Fleet Personnel Management

z

Organization structure

z

Staff levels, assignment, and utilization management

z

Employee classification and compensation

z

Employee training and professional development

Fleet Facility and Equipment Management

z

Facility design, construction, and condition

z

Facility maintenance and housekeeping

z

Shop tools and equipment

(33)

32 Key Fleet Management Functions

Key Fleet Management Functions

Fleet Information Management

z

Fleet management information systems

z

IT infrastructure and support services

z

Ad hoc management analysis and reporting

Fleet Customer Relationship Management

z

Transaction-based communication

z

Operator satisfaction measurement

z

Ongoing relationship management

Fleet Financial Management

z

Budgeting

z

Cost charge-back system design and management

z

Revolving fund management

(34)

33 Recap: Key Elements of an Effective Fleet

Recap: Key Elements of an Effective Fleet

Management Program

z

Understanding of fleet management goals (quality

versus cost)

z

Recognition of the need to promote fleet

management as a distinct, important, and complex

area of endeavor

z

Formally designated responsibilities and authority

z

Dedicated budget and cost accounting

(35)

QUESTIONS

(36)

KEY TRENDS IN FLEET

MANAGEMENT

(37)

36 Traditional Concerns of Fleet Managers

Traditional Concerns of Fleet Managers

z

Asset management

Acquisition

In-servicing

Deployment/utilization

Maintenance and repair

Fueling

Replacement

(38)

37 Concerns of Fleet Managers Today

Concerns of Fleet Managers Today

z

Asset management

z

Financial management

z

Decision maker management

z

Customer management

z

Personnel management

z

Supplier management

(39)

38 Asset Management Challenges

Asset Management Challenges

z

Making sense of new automotive and fuel

technologies

z

Building a sustainable, green, or eco-friendly fleet

operation

z

Justifying fleet size, composition, and utilization

z

Justifying vehicle replacement cycles/policies

z

Determining which activities to outsource

(40)

39 Financial Management Challenges

Financial Management Challenges

z

Quantifying, justifying, and controlling fleet costs

z

Distributing costs to fleet users

z

Managing dedicated fleet (e.g., “revolving”) funds

z

Working through the budgeting process and

influencing funding decisions

z

Understanding alternative capital financing

(41)

40 Decision Maker Management Challenges

Decision Maker Management Challenges

z

Articulating the value of the fleet

z

Advocating for the needs of fleet users

z

Providing enterprise-wide information

z

Exerting influence over decision making

z

Dealing with organizational changes (e.g., M&A)

(42)

41 Customer Management Challenges

Customer Management Challenges

z

Treating fleet users like customers

z

Minimizing “regulation” of fleet user behavior

z

Understanding customers’ asset and service needs

and how to meet them

z

Understanding where you can add value to fleet

management processes and where you can’t

z

Demonstrating cost competitiveness

(43)

42 Personnel Management Challenges

Personnel Management Challenges

z

Recruiting

z

Developing

z

Training and Certifying

z

Retaining

(44)

43 Information Management Challenges

Information Management Challenges

z

Optimizing data capture and processing activities

z

Turning data into information and information into

insight

z

Using information to foster accountability – upward,

downward, outward

(45)

44 Effective Fleet Management Today Requires

Effective Fleet Management Today Requires

Understanding Trade

-

offs

z

Asset management versus business management

z

Value-adding activities versus being a “jack of all

trades”

z

In-house versus outsourced activities

z

Processing data versus producing and using

(46)

45 Effective Fleet Management Requires

Effective Fleet Management Requires

Understanding Your Core Competencies

z

Operational knowledge

z

Customer knowledge

z

Management knowledge

z

Political knowledge

(47)

46 Effective Fleet Management Requires

Effective Fleet Management Requires

Focusing on Core Fleet Management Roles

z

Managing vehicle performance

z

Managing customer satisfaction

z

Managing management satisfaction

z

Managing employee performance

z

Managing costs

(48)

47 Move to Modern Fleet Management

Move to Modern Fleet Management

(49)

48 Move to Modern Fleet Management

Move to Modern Fleet Management

(50)

49 Vehicle Use Management

Vehicle Use Management

(51)

50 New Information Services

New Information Services

(52)

51 Environmental Emphasis

Environmental Emphasis

(53)

52 Mobility Management

Mobility Management

(54)

53 Interesting Ideas

Interesting Ideas

(55)

54 Fleet Architecture

Fleet Architecture

(56)

QUESTIONS

(57)

COMPUTERIZED FLEET

MANAGEMENT

INFORMATION SYSTEMS

AND ANALYTICAL TOOLS

(58)

57 Fleet Management Systems

Fleet Management Systems

z

Fleet Management Systems (FMS) Landscape

z

FMS-What they do (and what they don’t do)

z

FMS-What are key decisions to make

z

FMS-Who gets involved in the decision making

z

FMS-Building the Business Case for a new FMS

(59)

58 What is FM really about?

What is FM really about?

z

Fleet Policy (Requirements, Provision,

Remuneration)

z

Fleet Strategy (Size, Mix, Use, Select, Replace)

z

Fleet Management (Use, Costs, Capital)

z

Fleet Information (Policy, Strategy, Management)

z

Fleet Operations (Buy, Maintain, Sell)

z

Fleet Administration (Register, Insure)

z

Fleet Information (Operations, Admin, Accounting)

z

Fleet Accounting (Operating Costs, Capital Costs)

(60)

59 Why do you need a FMS?

Why do you need a FMS?

z

Collect and consolidate “truckloads” of vehicle,

cost and transaction data

z

Assist in fleet administration and compliance

activities

z

Respond to ad-hoc management queries

z

Sense you have the fleet under control

z

Timely accurate information to make decisions

z

Develop improved fleet management strategies

(61)

60 Fleet Management Life Cycle

Fleet Management Life Cycle

(62)

61 Fleet Management Processes

Fleet Management Processes

(63)

62 Who needs fleet information?

Who needs fleet information?

(64)

63 Why do we need a FMS?

Why do we need a FMS?

(65)

64 What They Do

What They Do

(66)

65 What are the major decisions?

What are the major decisions?

(67)

66 Fleet Systems Decisions

Fleet Systems Decisions

(68)

67 Criteria

Your Response

Number of Users

5 Number of Locations

4 Number of Assets

1,200

Type of Assets

Cars, Trucks, Equipment

Number of Fleet Managers

3 Systems Environment

Windows

FMS Systems Budget

$25,000

Selection Criteria

(69)

68 Who gets involved in the decision?

Who gets involved in the decision?

(70)

69 Fleet Systems Market

Fleet Systems Market

(71)

70 What are the major issues?

What are the major issues?

(72)

71 System Integration

System Integration

(73)

72 The Business Case for a new FMS

The Business Case for a new FMS

(74)

73 Why Buy

Business Issue

Desired Outcome

Value Metric

Value Result

Reduced Fleet

Costs

Requirement to

reduce fleet costs

Fleet Cost reduction

by 5%

Total Fleet Costs

per Year

Saving

$500,000

Reduced Fleet

Emissions

Requirement to

reduce CO2

Fleet Emissions by

10%

Total Fleet CO2

per Year

Reduction

1200 tonnes

CO2

Improved Vehicle

Use Efficiency

Requirement to

reduce

inappropriate use

Fleet Size reduction

by 2%

Total Fleet Size

Reduction 10

Vehicles

$120,000

Improved

Management

Reporting

Requirement to

improve fleet

reporting

Regular Fleet Use

and Cost Reports

Reporting Quality

Index

Index up 8%

FMS Business Case

(75)

74 Why Buy

Business Issue

Desired Outcome

Value Metric

Better Vehicle

Selection Decisions

Improved Fleet Mix

Optimum Fleet Mix

Reduced Costs &

Emissions

Better Vehicle

Replacement

Decisions

Improved Vehicle

Replacement

Optimum Vehicle

Replacement Cycles

Reduced Capital in

Fleet

Better Vehicle Use

Decisions

Inappropriate Vehicle

Use

Optimum Vehicle Use

& Size

Reduced Fleet Size

Flexible Vehicle

Supply Decisions

Private & Commuter

Use Employer

Vehicles

Reduce Employer

Supplied Vehicles

Employee Supplied

Vehicles Ratio

FMS Business Case

(76)

75 Lesson

Information Architecture Review

Where is fleet data collected, stored and reported

Write Business Use Cases

Detail how you want to use the system

Prepare Implementation Plan

Plan how the FMS will live in your organisation

Investigate Software Heritage

Find out who and why it was developed

Vendor Knowledge

How much does the vendor know about FM

Local Installed Base

How many current FM clients use the FMS now

Development Cycle

Current version in the software development cycle

Customer References

You select the customers you want to reference

Beware the Demonstration

Vendor to run your scenarios in the FMS

Try before you Buy

Use Trial Software before Purchase

Use Fleet Systems Consultant

Jointly invest (50%/50%) in FSC for best result

Lessons

(77)

76 Fleet Systems Acquisition Process

Fleet Systems Acquisition Process

(78)

77 Trends in Fleet Management Systems

Trends in Fleet Management Systems

(79)

QUESTIONS

(80)

79 r(1+r)

n

(1+r)

n

_-1

EAC

=

NPV

∗

Where

:

EAC

Is the equivalent annual cost of a stream of

future costs

NPV

is the present value of a stream of future costs

r

Is the discount rate less inflation

n

Is the length in years of the stream of costs

Determining Optimal Vehicle Replacement

Cycles

(81)

80 Computing Motor Pool Rental Rates

Computing Motor Pool Rental Rates

R

_i

= TC

_i

/ U

_i

where:

R

_i

Is the rental rate for a vehicle (or piece of

equipment) of type i

TC

_i

Is the projected annual total cost of

providing all vehicles of type i

U

_i

Is the projected annual utilization of all

vehicles of type i

(82)

81 Computing Mechanic Staffing Requirements

Computing Mechanic Staffing Requirements

Where:

M

Is the number of FTE mechanics needed

H

_A

Is the average number of direct in-house M&R labor hours per

year to maintain and repair each vehicle of type "A"

N

_A

Is the number of assets of type "A" typically receiving all

in-house maintenance and repair services at the maintenance

facility for which staffing requirements are being computed

P

Is the average number of hours per year that each mechanic

working in this facility can devote to direct M&R activities

Σ

H

_A

N

_A

M =

(83)

82 Relationship of Preventive Maintenance Schedule

Relationship of Preventive Maintenance Schedule

Compliance Rate to Vehicle Repair Costs

$50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000

2000

2001

2002

2003

2004

Brakes

Transmission

Engine

PM Compliance 96%

PM Compliance 94%

PM Compliance 88%

PM Compliance 62%

(84)

83 Average Vehicle Age Relative to Average

Average Vehicle Age Relative to Average

Annual Vehicle Utilization

Patrol Unit Age and Utilization

(Average age = 2.5 years; Average utilization = 48,000 miles)

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 0 20 40 60 80 100 120 140

Months in Service

Utili

zation (mi

les)

(85)

84 $ 6,000

$ 6,000

5,000

4,000

3,000

2,000

1,000

0

0 M & R COST

M & R COST

0 20,000 40,000 60,000 80,0

00 100,000 120,000

LTD MILEAGE

Impact of Vehicle Age on LTD Maintenance

Costs

(86)

85

$0 $20 $40 $60 $80 $100 $120 2000 ₂₀₀₁ 2002 ₂₀₀₃ 2004 ₂₀₀₅ 2006 2007 2008 2009

C

o

st

(M

illions

)

Fiscal Year

Current

Fleet Replacement Expenditures

(87)

86

2000 ₂₀₀₁ 2002 ₂₀₀₃ 2004 ₂₀₀₅ 2006 2007 2008 2009 $0 $20 $40 $60 $80 $100 $120

C

o

st

(M

illions

)

Fiscal Year

Probable

Preferable

Fleet Maintenance Expenditures

(88)

87

2000 ₂₀₀₁ 2002 ₂₀₀₃ 2004 ₂₀₀₅ 2006 2007 2008 2009 $60 $80 $100 $120 $140 $160 $180

C

o

st

(M

illions

))

Fiscal Year

Status Quo

Fleet Renewal

Program

Combined Replacement and Maintenance

Expenditures

(89)

88 Ad Hoc Reporting

Ad Hoc Reporting

(90)

89 Reporting Portals

Reporting Portals

(91)

90 KPI Web Reports

KPI Web Reports

(92)

91 KPI Dashboard

KPI Dashboard

(93)

92 KPI Dashboard

KPI Dashboard

(94)

93 Telematics and Geo

(95)

94 New

New

Vehicle Specification/Selection

INSERT PC CARBOOK SCREEN SHOT

HERE

(96)

95 New Vehicle Pricing

New Vehicle Pricing

(97)

96 Repair Time Estimation

Repair Time Estimation

INSERT MITCHELL1 REPAIR (WIRING

DIAGRAM) SCREEN SHOT HERE

(98)

97 Electronic Repair Manuals

Electronic Repair Manuals

INSERT MITCHELL1 PARTS CATALOG

SCREEN SHOT HERE

(99)

98 Motor Pool Reservation Management

Motor Pool Reservation Management

(100)

99 Motor Pool Management Dashboard

Motor Pool Management Dashboard

INSERT AGILE ACCESS CONTROL

SCREEN SHOT HERE

(101)

100 Web

(102)

101 Project/Customer Management Portal

(103)

102 Excel

Excel

®

_-

_{based Vehicle Life Cycle Cost}

Analyzer

Replacement Cycle in Years: 1 2 3 4 5 6 7 8 9 10 11 12

Inflation Factor 1.00 1.03 1.06 1.09 1.13 1.16 1.19 1.23 1.27 1.30 1.34 1.38 Meter at replacement 9,926 19,852 29,778 39,704 49,630 59,556 69,482 79,408 89,334 99,260 109,186 119,112 CAPITAL COST

Projected Net Residual Value$ 10,227 $ 8,337 $ 6,796 $ 5,540 $ 4,516 $ 3,682 $ 3,001 $ 2,447 $ 1,994 $ 1,626 $ 1,325 $ 1,080 Plus Capital Equipment Sold with Vehicle

Total Residual Value$ 10,227 $ 8,337 $ 6,796 $ 5,540 $ 4,516 $ 3,682 $ 3,001 $ 2,447 $ 1,994 $ 1,626 $ 1,325 $ 1,080 Annual Depreciation$ 6,496 $ 1,890 $ 1,541 $ 1,256 $ 1,024 $ 835 $ 680 $ 555 $ 452 $ 369 $ 300 $ 245 Cumulative Depreciation$ 6,496 $ 8,387 $ 9,927 $ 11,183 $ 12,207 $ 13,042 $ 13,722 $ 14,277 $ 14,729 $ 15,098 $ 15,398 $ 15,643 Annualized In-Servicing and Decommissioning Cost$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $

-Total Capital Costs$ 6,496 $ 1,890 $ 1,541 $ 1,256 $ 1,024 $ 835 $ 680 $ 555 $ 452 $ 369 $ 300 $ 245

Average Annual Depreciation$ 6,496 $ 4,193 $ 3,309 $ 2,796 $ 2,441 $ 2,174 $ 1,960 $ 1,785 $ 1,637 $ 1,510 $ 1,400 $ 1,304 OPERATING COSTS

Mean Annual M&R Cost from EMS (uninflated)$ 617 $ 720 $ 1,234 $ 1,337 $ 1,851 $ 2,057 $ 3,291 $ 3,086 $ 3,394 $ 2,674 Extrapolated Annual Maintenance and Repair Cost (uninflated)$ 564 $ 682 $ 826 $ 999 $ 1,209 $ 1,463 $ 1,770 $ 2,141 $ 2,591 $ 3,135 $ 3,793 $ 4,590 Extrapolated Annual Maintenance and Repair Cost$ 564 $ 703 $ 876 $ 1,092 $ 1,360 $ 1,696 $ 2,113 $ 2,633 $ 3,282 $ 4,090 $ 5,098 $ 6,353 Annual Fuel Cost (uninflated)$ 1,006 $ 1,016 $ 1,026 $ 1,036 $ 1,046 $ 1,057 $ 1,067 $ 1,078 $ 1,089 $ 1,100 $ 1,111 $ 1,122 Annual Fuel Cost$ 1,006 $ 1,046 $ 1,088 $ 1,132 $ 1,178 $ 1,225 $ 1,275 $ 1,326 $ 1,379 $ 1,435 $ 1,493 $ 1,553 Total Annual Operating Cost$ 1,570 $ 1,749 $ 1,964 $ 2,224 $ 2,538 $ 2,921 $ 3,388 $ 3,959 $ 4,661 $ 5,525 $ 6,590 $ 7,906 Cumulative Operating Cost$ 1,570 $ 3,318 $ 5,283 $ 7,506 $ 10,045 $ 12,965 $ 16,353 $ 20,312 $ 24,974 $ 30,499 $ 37,090 $ 44,996

Average Annual Operating Cost$ 1,570 $ 1,659 $ 1,761 $ 1,877 $ 2,009 $ 2,161 $ 2,336 $ 2,539 $ 2,775 $ 3,050 $ 3,372 $ 3,750 TOTAL ASSET COST

Annual Total Cost$ 8,066 $ 3,639 $ 3,505 $ 3,480 $ 3,562 $ 3,755 $ 4,068 $ 4,514 $ 5,114 $ 5,894 $ 6,891 $ 8,151 Cumulative Total Cost$ 8,066 $ 11,705 $ 15,210 $ 18,690 $ 22,252 $ 26,007 $ 30,075 $ 34,589 $ 39,703 $ 45,597 $ 52,488 $ 60,639

Average Annual Total Cost$ 8,066 $ 5,852 $ 5,070 $ 4,672 $ 4,450 $ 4,335 $ 4,296 $ 4,324 $ 4,411 $ 4,560 $ 4,772 $ 5,053

NPV of Cumulative Total Cost$ 7,609 $ 11,042 $ 14,349 $ 17,632 $ 20,992 $ 24,535 $ 28,373 $ 32,632 $ 37,456 $ 43,016 $ 49,517 $ 57,206

Equivalent Annual Cost$ 7,838 $ 5,771 $ 5,073 $ 4,743 $ 4,584 $ 4,529 $ 4,554 $ 4,649 $ 4,811 $ 5,043 $ 5,352 $ 5,747

Cost Savings (per vehicle) Associated with Replacing in this Year$ (2,091) $ (24)$ 674 $ 1,004 $ 1,163 $ 1,218 $ 1,193 $ 1,099 $ 937 $ 704 $ 395 $

-Total Cost Savings (all vehicles) Associated with Replacing in

this Year $ (2,059,148)$ (23,440)$ 664,160 $ 988,588 $ 1,145,862 $ 1,175,1451,199,685 $ $ 1,082,033 $ 922,458 $ 693,736 $ 389,496 $

-Age

Extrapolated

M&R Cost *NOTE: The first time through or if you change the trendline, run ctrl+t to recalculate the data.

1 564 2 682 3 826 4 999 5 1209 6 1463 7 1770 8 2141 9 2591 10 3135 11 3793 12 4590 13 5553 14 6719 15 8130 16 9838 17 11903 18 14403 19 17427 20 21086 21 25513 22 30871 23 37353 24 45196 25 54686 26 66168 27 80062 28 96873 29 117214 30 141826

Average M&R Cost per Unit Based on Mean Annual Usage

y = 466.08e0.1906x R2 = 0.9663 $-$500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 0 1 2 3 4 5 6 7 8 9 10 11 12 Age (Years) M&R Co s ts