Auto-Delivery provides expedited delivery of auto parts to car repair shops throughout the city. To accomplish this,
Question:
Auto-Delivery provides expedited delivery of auto parts to car repair shops throughout the city. To accomplish this, AutoDelivery has a fleet of ten pickup trucks of various makes. Every truck has five major components which have heavy service intervals: motor, transmission, brakes, radiator, and tires. Each maintenance event requires the trucks to be removed from service for a day. When the events are due, AutoDelivery takes each truck to a local service center, for the maintenance to be completed. Local service center charges fixed rates for each service event. Current rates are:
These rates went into effect on January 1, 2020. They increase each January 1st by 3%.
Question:
In the spreadsheet , AutoDelivery’s Director of Finance has provided you with the manufacturer, current mileage, and planned replacement dates for each of its ten trucks. Also, for each of the trucks’ 5 major components, the service intervals and miles since last service are provided. The Director has asked you to generate an annual forecast of the remaining component expenses for each truck, by year, until the trucks are replaced. Your forecast should begin with 2021; it is not necessary to forecast expenses for the remainder of 2020.
Assumptions
Because AutoRapid is expanding to areas outside of the city, annual mileage driven by each truck is expected to increase each year.
AutoRapid’s sales manager has provided you these estimates of annual miles per vehicle to assist you in completing your maintenance forecast:
Year Miles Per Truck
2020 22,000
2021 23,500
2022 25,000
2023 27,000
2024 29,500
and beyond
All mileages on the spreadsheet “Excel Sheet” were collected on October 30, 2020. Services will be completed when due, no matter how close a truck is to its replacement date.
Quantitative Methods for Business
ISBN: 978-0324651751
11th Edition
Authors: David Anderson, Dennis Sweeney, Thomas Williams, Jeffrey cam