Problem1. In view of increasing number of deaths on the road, the Police Department plans to introduce more speeding cameras. The average cost of each camera is about Rs 2 million. Assume that the life time of the camera is about 5 years and that the maintenance cost is about 1% of the purchase cost.
Question1. Supposing each speeding ticket brings revenue of Rs2, 000, how many speeding tickets per day should each camera generate for the project to break even in two years?
Question2. How sensitive is the project with respect to the changes in number of speeding tickets issued per day?
Question3. Is there a clear business case for the installation of speeding camera?
Question4. It is argued that drivers slow down just before the speeding cameras only to resume a higher speed just after. This is why it is proposed to evaluate the average speed of a vehicle in a locality before deciding to give a speeding ticket or not. Perform a technical feasibility study for this requirement.
Question5. In one of the places where a speed camera has been installed, the revenue from fines has fallen below target such that its maintenance is no longer profitable. What would conclude from this and what would be your recommended action?