Amsterdam LLC is a transportation company that transports clients to and from their destination throughout the states of Ohio, New York, and Illinois. The company operates over 1,500 vehicles and consumes at least 3 million gallons of fuel per year. The company has realized that the operation and maintenance of the outdated vehicles are becoming environmentally unfriendly. In order for Amsterdam LLC to reduce greenhouse gases and reduce transportation costs, lower management has proposed purchasing new midsize vehicles with automatic transmissions that achieve at least 30 MPG.
At the present time, executive management does not see the benefit of purchasing fuel efficient vehicles. Over the last three years, Amsterdam LLC has seen their rivals replace their outdated fleet with fuel efficient vehicles and noticed that their clientele base has increased by 20% and the company’s ability to reduce transportation costs, which lead to lower prices and greater competition. Lower management believes replacing the older fleet will create a new market of customers that are environmentally conscientious. Variables
Is there a difference in mileage based on the type of midsize car? 1. Independent Variable – Mid-size vehicle
2. Dependent Variable – Mileage
Amsterdam LLC will replace all 1500 vehicles in order to stay competitive with the current market. Target Population
According to the Fuel Economy (2014), every midsize vehicle equipped with automatic transmission has an EPA combined city and highway mileage estimate of 30 MPG or less and could save a business or person at least $765 per year assuming that 15,000 miles are driven. The top five vehicles that management will consider are the Buick LaCrosse, the Acura ILX Hybrid, Chevrolet Malibu, Chevrolet Volt and the Chrysler 300. Sample Size
Because the size of the vehicle sample will costly, Amsterdam LLC will lease 100 midsize fuel efficient vehicles from the list above to analyze the results. Simple Random Sampling
In order to be 95% confident the sample size must be at 385 vehicles. To enforce the studies validity, Amsterdam LLC will collect the vehicles Fuel Economy and Environment Labels that are placed on new vehicles. The labels will show three separate values that will contribute to the study. The Fuel Economy and Environment Label City MPG, the Fuel Economy and Environment Label Highway MPG, and the Fuel Economy and Environment Label Combined MPG. These values will be added to an Excel spreadsheet that already exists for the 100 leased cars. Conclusion
Without executive management dismissing the idea all together, they have decided to evaluate the study to support the benefits of replacing the fleet with fuel efficient vehicles in order to save money, reduce costs, and reduce greenhouse emissions.
Sample size = (Z-score)squared(Standard Deviation)(1-Standard Deviation)/(margin of error)squared Sample size = (1.96)(1.96)(.5)(.5)/(.05)(.05)
Sample size = 385
Fuel Economy (2014). “2014 Model Year”. Retreived on October 28, 2014 from www.fueleconomy.gov