Fleet Cost Formula: Is It Really This Simple?

As part of a fleet reduction initiative, the city of Philadelphia developed a formula designed to quantify the relationship between size of fleet and overall costs, an Automotive Fleet article reports. In this formula fleet size was a super-variable in determining aggregate costs.

FC = (A + R/M + F+ I/O) x #V

(A = acquisition costs. R/M = repair/maintenance costs. F = fuel costs. I/O = indirect/overhead costs. #V = number of vehicles in the fleet.)

Though there is merit to this formula, fleet cost reductions are not as simple as reducing fuel costs or acquisition costs. There are certain variables that impact costs that are not included, such as maintenance intervals and insurance costs.

In the end, if your goal is to reduce costs while maintaining or improving the end service product, you must include additional variables. Or, as the old says goes, sometimes you have to “see the forest for the trees.”

Related Blogs

Contact Us

"*" indicates required fields


Ready To Get Your Silver Back?

Want to put some silver back in your pocket? Sometimes it pays to put a fresh set of eyes on your operating expenses.

Call Now Button