A Southem Georgia school district is considering ordering 52 propane-fueled scho

Question

A Southem Georgia school district is considering ordering 52 propane-fueled school buses. "They're healthier, they're cleaner burning, and they're much quieter than the diesel optsion, said a school administrator. Propane-powered buses also reduce propane model, $13,000 more than the diesel equivalent The propane bus operating cost (above and beyond fuel cost) is 27 cents/mile, compared to 36 cents for the desel. Diesel fuel costs about $5/gallon in Georgia, about $1 more than propane. Bus mileage s 13 mog for the propane modei vs. 12 mpg for diesel. The life of a school bus in the district averages 8 years, and each bus travels an average of 33,000 miles per year because the district is so large and rural. Which bus is the beter choice based on a life-cycle analysis? The total cost of using one propane-fueled bus during its life cycle is PRound your response to the nearest dolar)

Explanation / Answer

Total life cycle cost of using one propane fueled bus = Purchase cost+Operating cost+Fuel cost.

Purchase cost = 95000 $

Operating cost(for life of 8 years) = 0.27*8*33000 = 71280 $

Fuel cost =[Number of miles/Mileage]*Fuel cost per gallon = [(8*33000)/13]*4 = 81231 $ (approx)

Total cost = 95000+71280+81231 = 247511 $

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