Homework: Chapter S5 Homework 5 of 10 (10 complete) HW Sco Score: 0 of 1 pt X) P
ID: 2340518 • Letter: H
Question
Homework: Chapter S5 Homework 5 of 10 (10 complete) HW Sco Score: 0 of 1 pt X) Problem S5.5 What is the crossover point in miles between the hybrid vehicle and the alternative vehicle from a competing auto manufacturer? Alternative Vehicle Hybrid Vehicle Vehicle Purchase Cost Vehicle Operating Cost per Mile Useful Life of Vehicle Miles per Year Miles per Gallon Average Fuel Price per Gallon $18,000Vehicle Purchase Cost $0.13 15 years Useful Life of Vehicle 15,500Miles per Year $19,500 $0.10 15 years 15,500 Vehicle Operating Cost per Mile Miles per Gallon Average Fuel Price per Gallon $3.77 $3.77 The crossover point, M, is miles (round your response to the nearest whole number) Enter your answer in the answer box and then click Check Answer. All parts showing Clear AlI Chec This course (Introduction to Operations & Supply Chain M (1) is based on Heizer / Render / Munson, Operations Management, 12Explanation / Answer
M is the cross over point at which both the vehicles total cost will be equal:
total costs => purchase cost + [operating cost per mile + average fuel price per gallon / miles per gallon] * number of miles
at M mile,
total cost of hybrid vehicle = total cost of alternative vehicle
=>$18,000 + [$0.13 + ($3.77/31)]* M miles = $19,500+[$0.10+($3.77/35)]*M miles
=>$18,000 + [$0.252 M miles] = $19,500+ [$0.208 M miles]
=>$1,500 =$0.044 M miles
=>M = 34,091 miles.......(rounded to nearest whole number).
The cross over point M is 34,091 miles .
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