Fleet Out-Sourcery

Optimizing the Outsourced Share of Rental Activity

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The Idea

• If rental demand is variable, and• If you have access to an outsource supplier

• How do you optimize rental fleet size?• Can it affect rates?

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Based on projecting 5,439 Chargeable days

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• -Project 4 factors for the next year• #Chargeable days• Monthly distribution of days• Utilization of fleet/Turns• Costs-annual-monthly• Outsourcing• Cost/each additional fleet vehicle• Administrative Costs

Key Ingredients to Optimize Sedans

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95% Projection for next year

Actual Next Year % Projected/Actual

FY 2010 6,539 5,304 123%FY 2011 4,938 5,894 84%FY 2012 5,439 5,717 95%FY 2013 5,416 5,669 96%FY 2014 5,302 5,838 91%

Cumulative 27,634 28,422 97%

Projecting Chargeable Days- A Pinch of Caution

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Projecting FY 2012 Distribution of Days for MS Sedans

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Tot

Projected Monthly Distribution of Chargeable Days 394 442 494 771 554 266 258 348 459 558 443 452 5,439

% Annual Total / Five year average

0.073 0.081 0.091 0.142 0.102 0.049 0.047 0.064 0.084 0.103 0.081 0.083 1.00

High Low

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Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Tot

Proj. Monthly Distribution of

Chargeable Days

395 393 503 732 524 252 236 336 459 578 448 446 5,302

Fleet Utilization (Chargeable

Days/Month/Vehicle)

22 22 28 41 29 14 13 19 26 32 25 25

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Fleet Utilization (Chargeable

Days/Month/Vehicle)

18 18 23 33 24 11 11 15 21 26 20 20

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The Role of Vehicle Utilization in Determining Fleet Size

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Essential Cost Information

Monthly Annual

Fleet Vehicle Cost

Monthly Depreciation 191.00 Interest 24.96

Insurance 37.00 Subtotal 252.96 3,035.52

Outourced Daily charges 41.00

Annual Adminstrative Costs 6,657.42 79,889.00

JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN0

100200300400500600700800900

Budgeted Outsourced DaysBudgeted Chargeable Days

Months

Budgeted Chargeable

Days

JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN0

100200300400500600700800900

Actual Outsourced Days

Actual Chargeable DaysMonths

Actual Chargeable

Days

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FY 12 Budgeted

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun TotTotal Chargeable Days 394 442 494 771 554 266 258 348 459 558 443 452 5,439

Utilization23.3

Ave. Fleet Size19.0

Days Provided by Fleet 394 442 443 443 443 266 258 348 443 443 443 443 4,808

Outsourced Days - - 51 328 112 - - - 16 115 - 9 631

5,439

FY 12 Actual

Days Provided by Fleet 349 418 454 444 382 275 203 332 418 524 443 366 4,608 Outsourced Days 76 42 174 318 181 7 8 10 64 116 36 77 1,109

Total Days 425 460 628 762 563 282 211 342 482 640 479 443 5,717

Utilization 20.5 24.6 25.2 24.7 21.2 15.3 11.3 18.4 17.4 29.1 24.6 20.3 21.0Fleet Size 17 17 18 18 18 18 18 18 24 18 18 18 18.3

Planned Utilization, Days and Fleet Size Versus actual

By under-projecting activity levels fleet resources were not wasted. Surge was met by outsourcing

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Review and SummaryFleet

Utilization (Days/Mo.)

Fleet Size (#Vehicles)

Fleet Chargeable

Days

Outsourced Chargeable

Days

Total Chargeable

Days

Annual Cost Less

Maintenance & Fuel

Daily Rate

$41/Veh/Day Projected

0% Outsourcing 23.3 34 5,439 - 5,439 180,364$ 33.16$

100% Outsourcing 23.3 - - 5,439 5,439 302,878$ 55.69$

Optimal 23.3 21 4,808 631 5,439 161,277$ 29.65$

Actual FY 2012 Approved

21.0 18.3 4,608 1,109 5,717 31.00

Revenues 177,227$

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FY 2012 Planned Days versus Actual

Budgeted

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun TotDays Provided by Fleet 394 442 443 443 443 266 258 348 443 443 443 443 4,808

Outsourced Days - - 51 328 112 - - - 16 115 - 9 631 Total Days 394 442 494 771 554 266 258 348 459 558 443 452 5,439

Actual

Days Provided by Fleet 349 418 454 444 382 275 203 332 418 524 443 366 4,608 Outsourced Days 76 42 174 318 181 7 8 10 64 116 36 77 1,109

Total Days 425 460 628 762 563 282 211 342 482 640 479 443 5,717