Week 4 Team Paper

2639 words - 11 pages



Feasibility of Adding AFVs to Fleet
COMM/215

Most people rent vehicles for traveling because they do not want to place unnecessary mileage on their personal vehicles. Challenges are faced concerning long distance traveling. This study will demonstrate the range of distance and energy used for typical Alternate Fuel Vehicles (AFV’s) and a challenge concerning the cost to the AFVs. For electric vehicles viewers of this analysis will see that AFV’s effect the pricing structure for power companies. A chart is provided which, will demonstrate potential vehicle costs for switching from traditional fuel vehicles to AFV’s.
This assessment will show ...view middle of the document...

New York State Energy and Development Authority do their part in fuel emissions. The cost to refuel our vehicles has an impact on the company and its customers. Fuel efficiency of AFV’s will be compared to the costs of the traditional gas used today.
The Chief Finance Officer (CFO), Frederick Astaire has been considering the possibility of adding Alternative Fuel Vehicles (AFV) as part of the Lotus Car Rentals fleet. He would like an assessment completed stating the feasibility of making this switch. Mr. Astaire chose two of the company’s top budget consultants and two of its Finance officers to work as a team researching the possible costs and the best way to get the project started. This report explains why it is recommended that Lotus Car Rental Company take it slow with a practice fleet before plunging into a total switch to AFV’s while exercising the use of government funding and incentives.
Background Information
The U.S. Department of Energy has a number of incentives which, are aimed at encouraging fleet owners to reduce their reliance on gasoline and other fossil fuel. The aim of the program is to reduce overreliance on imported oil, and to cushion the American economy against external shocks which, are caused by price fluctuations in the international oil markets. Furthermore, the use of alternative fuel vehicles (AFVs) will reduce the amount of carbon dioxide emissions in the environment, and therefore, increase chances of making the U.S. economy sustainable. Alternative fuel vehicles (AFVs) are vehicles, whose engines are powered by other forms of fuel apart from gasoline and fossil diesel (Golob et al., 1997).
Previous research on AFVs and their feasibility was motivated by the oil crises that affected the global economy in the 1970s, and this led to increased concerns on dependence on oil as a key source of energy. According to Golob et al. (1997), “initial research focused on the ability of fleets to use AFVs because they were expected to have a lower range” (Golob, 1997). Concerns about air quality led to reemergence of the issue of commercial fleet adoption of AFVs in 1980s.
Golob et al. (1997) observe that in a bid to make a rational decision concerning switching to AFVs, a number of hypotheses that emerge from previous studies must be taken into consideration. The first hypothesis is vehicle-operating characteristics are crucial in fleet purchasing decisions (Golob et al., 1997). Some of the attributes include direct operation cost, reliability, as well as job sustainability. Another crucial consideration is availability of on-site refueling and on-site maintenance facilities. Furthermore, the cost of acquiring and training experts must be taken into consideration. The final factor that supports this hypothesis is that some classes of vehicles, for instance pickup trucks and vans, are a more likely candidate for alternative fuel because they cover lower mileage per annum (Golob et al.,...

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