The student chapter of the American Society of Mechanical Engineers is planning

Question

The student chapter of the American Society of Mechanical Engineers is planning a six-day trip to the national conference in Albany, NY. For transportation, the group will rent a car from either the State Tech Motor Pool or a local car dealer. The Motor Pool charges $0.37 per mile, has no daily fee, and pays for the gas. The local car dealer charges $32 per day and $0.21 per mile, but the group must pay for the gas. The car ’s fuel rating is 21 miles per gallon, and the price of gas is estimated to be $2.08 per gallon. at what point in miles, is the cost of both equal. in other words find the break even point in miles

Explanation / Answer

Here we have to calculate individual components, The motor pool charges of 0.37 per mile is straight forward and already calculated so lets go for another one

$0.21 per mile is charged as fee

per mile fuel expenses = 2.08/21 = $0.099 per mile

So for now total is $ 0.309 per km

Now we have to look for breakeven point, Here $32 is charged per day, Let us see break even point for each day first

0.370-0.309 = 0.061 is the difference

$32/0.061= 524.5 miles per day

If they drive 524.5 miles per day it will break even with motor pool

or at 3147 miles per whole 6 day trip.

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