Abstract
ABSTRACT:
The over-all objective of Department of Agricultural and Applied Economics (University of Georgia) study was to develop a dynamic control model for determining the present value of operating costs of biodiesel vehicles and its competitors, diesel, methanol, and compressed natural gas. Accordingly, this analysis aimed at comparing the expected life cycle costs of operating a transit vehicle fueled with these alternative fuels.
The method assumes that transit authorities have developed a procedure for optimally determining when a car engine should be rebuilt or replaced. Given this optimal timing, the model estimates what the marginal cost per month should be to obtain this optimal timing.
Knowledge of this marginal cost along with information on infrastructure, refueling, and any incremental car capital costs, allows the comparison of net present value for alternative fueled vehicles with diesel vehicles. Such a comparison accounts for not only the explicit cost such as maintenance but also the opportunity cost, including loss of goodwill, associated with vehicle failure.