Topic: expression for annualized costSubscribe | Previous | Next
Dorji Yangka 9/25/2017
hi taylor,
I am attaching herewith an excel file containing data on a demand device in the transport with three different expressions for specifying the device cost using the annualized cost.
It will be much appreciated if your good self could kindly clarify this seemingly silly doubt from my head please.
thanks
Dorji
LEAP cost_enquiry.xlsx [6]
Emily Ghosh 10/20/2017
Hi Dorji,
I'm so sorry, I seemed to have missed answering this question earlier. Since you are using the Cost per Activity method and since the Demand Cost variable requires the annual cost, the first expression listed in your spreadsheet, AnnualizedCost(0.02,10), appears to be the right way to go.
Hope this helps,
Emily
Emily
Dorji Yangka 10/25/2017
thank you Emily for the clarification.
but the cost expression, Annualizedcost(0.02, 10) appears to me like carrying out the annualization process twice. since 0.02 is obtained by dividing the annual passenger kilometer by the capital cost of the bus.
Annualizedcost(0.02, 10) expression will annualize 0.02 over ten years period, which will be very small!
thank you,
Dorji
Emily Ghosh 10/25/2017
Hi Dorji,
Another way to calculate the Demand Cost would be to annualize the capital cost and then divide the result by the annual passenger km to get an annual $/km value. The expression would look like this:
AnnualizedCost(39205,10)/1966198
This gives the same value as the other expression, but hopefully alleviates your concern about double-counting the annualization. And you are right, the resulting number is fairly small. While this is mostly because the calculation is on a cost per activity basis, I do think that the capital cost assumption for the bus may be a bit low (the capital cost of a typical diesel bus is more around the $350,000 range).
Thanks!
Emily