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City speed - There are 2 options that are currently available to you, the Board of Directors, the first is to purchase more vehicles in addition to the current fleet and the other is to expand to a new location from which to run the company.

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Introduction

CitySpeed Brief Introduction There are 2 options that are currently available to you, the Board of Directors, the first is to purchase more vehicles in addition to the current fleet and the other is to expand to a new location from which to run the company. New Vehicles Advantages The advantages of purchasing 15 low-floor easy-access buses are that it leads to a growth in the size of the current operating fleet. As can be seen from the benchmarking data although the current fleet size is bigger than our rivals, Destina, the average age of the fleet is double theirs. The introduction of new buses to the fleet will allow the customers to travel in more luxurious surroundings and so will increase the overall pleasure of the journey which is likely to lead to more people wanting to use our company's buses on a regular basis. The fact that these new low-floor easy-access buses operate as a fifth of Destina's fleet shows that they are a forward thinking company who are looking towards maintaining a greater market share by improving the level of customer satisfaction. ...read more.

Middle

The answer is probably not, as the majority of the fleet will still be rapidly ageing thus unreliable and uncomfortable so unsatisfactory for the customer. Is it also possible that these new buses will lower maintenance costs? Again probably not as the rest of the fleet will still be ageing with repairs growing increasingly more expensive so this problem is unlikely to be solved with such ease. The new vehicles also carry a high initial outlay and with gearing still at 40% wouldn't this present a problem in obtaining the necessary funds to purchase these new vehicles. The payback on this investment is also longer which could present a problem in a time of economic instability. The vehicles' expected life of 15 years is only half that of the new depot investment so more money will be needed sooner to pay for more improvements. New Depot Advantages As the company's position in our current market begins to weaken due to the increasing growth of our main rival, Destina, in the market place the possibility of moving our company to a new out of town purpose-built location would seem like a good option as it presents the opportunity to bring about a start to a whole new era for the company. ...read more.

Conclusion

that we was unable to repair with the new maintenance facilities we would be unable to replace due to having no reserves and also having a high gearing ratio it is unlikely banks would allow us to borrow from them. The fleet would still be considered out of date from a customers point of view compared to the relative youthfulness of the Destina fleet so passenger journey figures may decrease yet again as customers look for a much more appealing method of public transport to get them out of their cars which in this case would no doubt resort in them using Destina's new low-level easy-access so more convenient to travel on buses. Summary In summary I believe for our company to succeed in consolidating our position in the market place I believe that the most suitable option would be to invest in the new vehicles as this is the side of our company that the customer sees and feels so this is the aspect that we will be judged upon, and it is after all the customers that we are aiming to please to ensure they will keep using our buses. ...read more.

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