UAF's light-duty vehicle fleet lifecyle, maintenance costs and composition: ordinary least square regression and panel data analysis

Abstract

The University of Alaska Fairbanks maintains a vehicle fleet for use by its staff, faculty, and students. Given the multifaceted needs of the campus and the impact that the harsh subarctic climate can have on vehicles, management of the fleet to meet the needs of its users is a complex task. One method UAF uses to manage the cost of the fleet is to extract the depreciation expense from each fleet vehicle into a non-interest bearing recharge account to eventually purchase its replacement. While several reviews have been conducted regarding the management of this fleet, a gap in research involves analysis of cost of this fleet over its lifecycle. This study examined the effects of fleet vehicle lifecycle extension beyond the predetermined 10-year useful life at UAF. Three novel datasets were created from UAF Facilities Services' archival maintenance work order data: a vehicle dataset, work order dataset, and a panel dataset. Ordinary least squares regression methods were used to examine the impact of model year on a vehicle's nominal purchase price and the impact of vehicle specification on real purchase price. Fixed and random effects panel methods were used to examine the impact of vehicle specification and vehicle age on maintenance costs. The effects of extending the fleet lifecycle from ten to twenty-years on maintenance and operational cost were estimated. Population dynamics models estimated the impact of the ten year lifecycle extension on the replacement fund. The results of this study suggested increasing vehicle lifecycles by ten years increased operating, maintenance, and replacement costs and effectively reduced the replacement fund purchasing power. The extension of vehicle lifecycles resulted in continually increasing rental rates and ultimately to the insolvency of the replacement fund.