n the value analysis, 1) calculate the amount of annual cost for airline and for Cessna Citation S/II with an average of five persons per trip (assuming that the rental car expense remains the same). Show your calculation process. The original total cost calculation with 4 passengers can be found on Page 336 and 337. 2)Use the result to decide which transportation method is more sensitive to the increase in passenger load. (8pts)
Appendix B Appendix B AIRLINE (Delta) 336 $47,904.00 -18,682.58 $29,221.44 1. Ticket Cost $499.00 x 96 Trips Less 39% Tax Savings Total Cost of Airline Tickets $ 177.14 2. Value Per Man Hour $120,000 X 3.1 VMH = 2100 70,572.58 3. Cost of Executive Time 4.15 hrs. x 96 trips x $177.14 $27,718.87 -4,157.83 4. Productivity Credit (15%) 1.63 hrs. X 96 trips X 177.14 = Less 15% Productivity Factor = $66,414.75 Total Cost of Executive Time 5. Other Business Expenses Hotel (4 rooms x $95.00 X 12 times) Food ($45/man per day for 1.5 days X 12 times) Car (2 days @ $52/day x 12 times) $4,560.00 3,240.00 1,248.00 Business Expenses Less 39% Tax Savings 9,048.00 -3,528.72 Total Business Expenses $5,519.28 Airline Cost Summary: Total Ticket Costs Total Executive Time Cost Total Business Expenses $29,221.44 $66,414.75 $5,519.28 Total Cost for Airline $101,155.47 NOTES: 1. 96 Trips = 24 legs/year x 4 executives Annual Salary x 3.1 (Support Factor) 2. VMH = 42 hrs./week X 50 weeks/year 3. 4.15 hours represents Total Trip Time. 4. 1.63 hours represents Actual Flight Time. 5. 12 times = 12 times/year to Bessemer. Figure B-13. Tampa-Atlanta-Bessemer 337 CORPORATE AIRCRAFT (CITATION SAI) 1. Aircraft Costs $1,901.00/hr X 1.07 hrs. X 24 legs 2. Cost of Executive Time 2.07 hrs. X 96 trips x $177.14 $48.817.68 $35,201.26 3. Productivity Credit (75%) 1.07 hrs. X 96 trips X $177.14 = Less 75% Productivity Factor = $18,195.82 -13,646.87 Total Cost of Executive Time Corporate Aircraft (Citation S/II): $21,554.40 Total Aircraft Cost Total Executive Time Cost $48,817.68 21,554.40 Total Cost for Aircraft $70,372.08 Total Comparison Total Airline Cost Total Corporate Aircraft $101,155.47 70,372.08 Savings/Year $30,783.39 $1,282.64 Saved by Citation per Leg NOTES: 1. $1,901.00 is the operating cost per hour. 2. 1.07 is the En Route Time. 3. 2.07 hours is the Total Trip Time. Figure B-14. Tampa-Bessemer Appendix B Appendix B AIRLINE (Delta) 336 $47,904.00 -18,682.58 $29,221.44 1. Ticket Cost $499.00 x 96 Trips Less 39% Tax Savings Total Cost of Airline Tickets $ 177.14 2. Value Per Man Hour $120,000 X 3.1 VMH = 2100 70,572.58 3. Cost of Executive Time 4.15 hrs. x 96 trips x $177.14 $27,718.87 -4,157.83 4. Productivity Credit (15%) 1.63 hrs. X 96 trips X 177.14 = Less 15% Productivity Factor = $66,414.75 Total Cost of Executive Time 5. Other Business Expenses Hotel (4 rooms x $95.00 X 12 times) Food ($45/man per day for 1.5 days X 12 times) Car (2 days @ $52/day x 12 times) $4,560.00 3,240.00 1,248.00 Business Expenses Less 39% Tax Savings 9,048.00 -3,528.72 Total Business Expenses $5,519.28 Airline Cost Summary: Total Ticket Costs Total Executive Time Cost Total Business Expenses $29,221.44 $66,414.75 $5,519.28 Total Cost for Airline $101,155.47 NOTES: 1. 96 Trips = 24 legs/year x 4 executives Annual Salary x 3.1 (Support Factor) 2. VMH = 42 hrs./week X 50 weeks/year 3. 4.15 hours represents Total Trip Time. 4. 1.63 hours represents Actual Flight Time. 5. 12 times = 12 times/year to Bessemer. Figure B-13. Tampa-Atlanta-Bessemer 337 CORPORATE AIRCRAFT (CITATION SAI) 1. Aircraft Costs $1,901.00/hr X 1.07 hrs. X 24 legs 2. Cost of Executive Time 2.07 hrs. X 96 trips x $177.14 $48.817.68 $35,201.26 3. Productivity Credit (75%) 1.07 hrs. X 96 trips X $177.14 = Less 75% Productivity Factor = $18,195.82 -13,646.87 Total Cost of Executive Time Corporate Aircraft (Citation S/II): $21,554.40 Total Aircraft Cost Total Executive Time Cost $48,817.68 21,554.40 Total Cost for Aircraft $70,372.08 Total Comparison Total Airline Cost Total Corporate Aircraft $101,155.47 70,372.08 Savings/Year $30,783.39 $1,282.64 Saved by Citation per Leg NOTES: 1. $1,901.00 is the operating cost per hour. 2. 1.07 is the En Route Time. 3. 2.07 hours is the Total Trip Time. Figure B-14. Tampa-Bessemer
