Fleet management in perspective Flashcards
Fleet management consists of what activities?
*Vehicle allocation
*Vehicle selection
*Fuel control
*Tyre control
What are the three types of organisational structure?
*Simple structure
*Functional structure
*Divisional structure
What are the objectives of fleet management system?
- Fleet planning
*Fleet control
*Financial planning
*Cost Control
To minimise the capital tied up in vehicles, the fleet operator should have what in mind?
- Vehicle Acquisition should be planned for the period immediately preceding a forecasted price increase.
*Investigate alternative methods of vehicle acquisition, re-examining the costs associated with each method on a regular basis( every 3/4 months)
- A general rule is that a company showing a high return on capital can benefit from not owning its fleet, while a company showing a low return may find it more economical to purchase.
What are the factors influencing the method of acquisition?
- Capital availability
- Cost of capital
*Outright purchase
*Return on capital - Release capital for alternative uses
*Residual value risks
what are advantages of outright purchase?
*Discount
*Replacement flexibility
*Freedom to change the supplier
What are the disadvantages of outright purchase?
*Cash flow
*Company capital and credit
Residual value
What are the advantages of guaranteed repurchase?
*Maximum benefit can be obtained form low cost capital borrowing
*Residual value fluctuation is passed on
What are the disadvantages of guaranteed repurchase?
*Reduced flexibility
What are the advantages of hire purchase?
*The balance outstanding on the vehicle could be paid out of revenue
*Tax relief is available on both capital and interest paid on loan
What are the disadvantages of hire purchase?
*Initial deposit is determined by the Rental company
*Reduced flexibility
What are the advantages of leasing?
*Company capital is released for alternative uses
*Flexibility
*Tax relief
What are advantages of an operating rental?
*Corporate tax
*Hidden gearing
*Residual values
What are disadvantages of an operating rental?
*Repair and maintenance costs must still be paid by the lessee
*It is an expensive method of vehicle acquisition
What are the advantages of full maintenance leasing?
*Staff minimisation
*Budgeting
*Corporate tax
