Faculty of  Management Sciences
                           Contents
      1. Objectives of the unit
      2. Scope of vehicle budgeting costing;
      3. Vehicle financing alternatives and sources of capital.
      4. Factors influencing the vehicle selection process.
      5. Factors that impact on the vehicle replacement decision.
      6. Scope and structure of a vehicle maintenance programme
      7. References 
         Faculty of Management Sciences
             1. Objectives of the unit 
        By the end of this unit, student should be able to:
         Discuss the operational costs of the vehicle;
         List the principles of preparing the operational budgets;
         Explain the vehicle financing alternatives and sources of capital;
         Discuss the factors influencing the vehicle selection process;
         Mention the factors that impact on the vehicle replacement decision.
         Discuss the elements and structure of a vehicle maintenance programme.
         Faculty of Management Sciences
              Importance of vehicle and Fleet costing 
    • Enable transport operators to make decisions regarding 
    
     Rates to charge & how they may be changed
    
     What vehicle to purchase
    
     When to replace vehicles based on economic grounds
    It establish proper management and financial controls.
    Costing system provide accurate information on how each or part of the 
    operations performs.  
         Faculty of Management Sciences
                   Factors affecting costs
      • Some factors are controllable while others are uncontrollable.
      Vehicle operating Expenses 
      • Fixed costs
      • Variable costs
      • Unforeseen expenses
      • Vehicle associated expenses
      • Overhead (administrative) expenses
          Faculty of Management Sciences
                            Fixed expenses
  • These are expenses that you will pay whether your fleet works or just stands.
  • Depreciation (lessen in value): the value of the fleet or vehicle depreciates in use and in 
   value.
  • Cost of finance: the interests paid to the bank on the money used to finance the vehicle
  • License and registration fees: the vehicle must be registered (once-off fee) and licensed 
   (paid every year)
  • Insurance taken out on the car to reduce the risk to the owner in case of damage or 
   accident. A fixed amount is paid per vehicle even if the vehicle is never damaged or 
   involved in an accident.
  • Driver wages