Need help developing an equation for real world application

[hansd007]

Hi,

I need a little help with a equation I am trying to develop, if there is anyone out there willing to help.

I operate a business which exports vehicles around the world.

We purchase a lot of cars and trucks and want to develop an equation which will allow us to save a lot of time evaluating whether we should buy a certain vehicle.

However, we are not math experts.

Here is what we are looking for.

There are 3 variables which we look at when purchasing a vehicle; Age, Mileage and Cost.

So based on those 3 variables we would like to create a equation which would give us a number. That number would help us determine whether that particular vehicle is a good bargain, or if we decide to make an offer, at which price we should buy.

x = profitiablity coeficient
a = age of vehicle
m = mileage of vehicle
c = asking price of said vehicle

We will re-create this equation in Microsoft Excel (i can handle that part) and we will be able to evaluate hundreds of vehicles at once and only focus on the highest profitability vehicles.

If you have questions, don't hesitate to ask.

 

[Quaid]

we will be able to evaluate hundreds of vehicles at once

From where are you importing this data? Perhaps, the source has filters available. For example, limiting downloaded records to vehicles within a specified age-range.

 

[Dale10101]

Does this make sense?

Hi,

I need a little help with a equation I am trying to develop, if there is anyone out there willing to help.

I operate a business which exports vehicles around the world.

We purchase a lot of cars and trucks and want to develop an equation which will allow us to save a lot of time evaluating whether we should buy a certain vehicle.

However, we are not math experts.

Here is what we are looking for.

There are 3 variables which we look at when purchasing a vehicle; Age, Mileage and Cost.

So based on those 3 variables we would like to create a equation which would give us a number. That number would help us determine whether that particular vehicle is a good bargain, or if we decide to make an offer, at which price we should buy.

x = profitiablity coeficient
a = age of vehicle
m = mileage of vehicle
c = asking price of said vehicle

We will re-create this equation in Microsoft Excel (i can handle that part) and we will be able to evaluate hundreds of vehicles at once and only focus on the highest profitability vehicles.

If you have questions, don't hesitate to ask.

You say you currently buy and sell a lot of cars and trucks. How is that possible using only 3 variables to determine your purchase and sales?

For example, how do you currently decide what the tradeoff is between those 3 variables, for example given a 2005 Dodge Intrepid with 150,000 miles, how do you stack it up against say a 2010 Ford escort with 80,000 miles. As for price, how would a 3 variable model determine as you suggest determine it market value.

Who do you buy from and sell to, do you buy and sell to and from individuals, or from, fleet owners, junk yards?

Honestly you can't just name variables and develop an equation you need some sort of knowledge about the relationship between the variables.

 

[hansd007]

@Dale10101,

Thanks for replying.

The vehicles are bought at auction and exported around the world.

However, no disrespect meant, the where, how and who we sell the vehicles to isn't relevant.

But I understand your last point and here is some additional info.

It is all the same type of vehicle.

So for example, we only purchase BMW X5's between 2006-2014.

So here is an example,

Year Mileage Price
2009 148,000 $22,900.00
2010 90,000 $25,200.00
2007 118,000 $24,995.00

We currently divide the mileage of the vehicle by the age (2014-2009 = 5 years old), which gives us the average mileage per year. If we see it's below the standard 15,000 to 16,000 miles driven per year, we then look at the price to see if they are asking a reasonable price given the mileage.

I hope that helps, and thank you for replying.

 

[hansd007]

@Quaid,

The data is coming from sites like craiglist and autotrader.

We will be importing it manually as the listings come in.

 

[HallsofIvy]

The point is that you are the one deciding how to value such things as 'age', 'make', and 'mileage' and only you can say how one is to be weighted over the others in your decision. Do you consider a 12 year old car with 120,000 miles better than a 15 year old car with 100,000 miles? There is a lot of value judgment involved here. Mathematics can't do the value judgment for you!