A car fleet manager working for a local council is thinking of gradually replacing the current fleet of vehicles used by the council with vehicles that use LPG (gas) rather than petrol. The concern is not so much the average price of petrol but rather the variability in price that occurs, as this becomes problematic for budgeting and managing reimbursements to employees. The fleet manager will upgrade the fleet to LPG-powered vehicles so long as the variability in the LPG price is lower than that of petrol. The fleet manager uses a website that collates data on fuel prices in the council region to produce the following summary statistics based on a random sample of prices drawn from the past year.

Interpret the output and comment on the variability observed for the price of each fuel. If you make this comparison using the standard deviation for each fuel type, what conclusion can you reach?

Suppose the fleet manager tells you that he prefers to compare variability relative to the size of each fuel?s mean price. Make a recommendation to the fleet manager about which vehicles should be used in the upgrade.

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Price of petrol (cents) Price of LPG (cents) 150.43 79.82 Average Standard deviation 5.44 6.19