Document


Title

Economic evaluation of crew carrier service life
Document Type: Report
Author(s): Mark S. Smith
Publication Year: 2000

Cataloging Information

Keyword(s):
  • crew transport
  • economic analysis
  • equipment maintenance information system
  • maintenance cost
  • regression analysis
  • service life
Record Maintained By:
Record Last Modified: December 13, 2016
FRAMES Record Number: 17130

Description

The Region 5 Hotshots currently have a request to the Mobil Fire Equipment Sub-Committee to address the issue of shortening the service life of crew carriers in the 308 vehicle class, from the current 14 year policy. The issue is supported by the mechanic representatives of this committee, based on the opinion that maintenance costs are exceeding vehicle value. Opinions that current vehicles may not bring a high enough resale value at a 14 year life were expressed by fleet management. The committee has determined that though the issue seems valid, they could not proceed any further toward approval until these opinions had been quantified. The goal of this paper is to determine a service life for crew carriers based on historic maintenance costs, mileage use, yearly depreciation and vehicle resale value. Three regression models were tested for their ability to reasonably predict projected costs and mileage at varying age intervals. A polynomial regression equation of y = a + b1(x) + b2(x^2) was chosen because of how well it fit the existing data. The resulting predictions were compared to depreciation rates and resale value trends. This was done to determine the point at which maintenance costs equaled vehicle value. Using these models, 3 alternative means for addressing the problem of service life are analyzed. The alternatives are for 10, 12 and 14 year service lives, 14 being a continuation of current policy. Under the current method of depreciation, (value based on unpaid balance), cost would equal net value at 9 years and 2 months. At a 5 percent depreciation rate for inflation, cost versus net value would be equal at 11 years and 2 months. Based on regression predictions for maintenance costs and mileage use, comparisons of past vehicle resale values, and projections that diesel powered vehicles would last 40 percent longer than older gas powered models, a recommendation for a 10 year service life is suggested. This paper was submitted in partial fulfillment of the requirements for the Technical Fire Management program.

Citation:
Smith, Mark S. 2000. Economic evaluation of crew carrier service life. Technical Fire Management Paper TFM-15-356. Duvall, WA: Washington Institute. 34 p.