12. Equipment cost – Caterpillar and Peurifoy method
The chapter provides a detailed overview of estimating total equipment costs using the Caterpillar and Peurifoy methods. It emphasizes the importance of understanding both ownership and operating costs, including depreciation, fuel costs, and maintenance. Step-by-step procedures for applying these methods are illustrated, offering practical guidance for effective cost estimation in construction equipment management.
Enroll to start learning
You've not yet enrolled in this course. Please enroll for free to listen to audio lessons, classroom podcasts and take practice test.
Sections
Navigate through the learning materials and practice exercises.
What we have learnt
- Understanding the difference between ownership and operating costs in equipment management.
- The Caterpillar and Peurifoy methods are widely used for estimating equipment costs.
- Key elements in cost estimation include depreciation, fuel consumption, and maintenance costs.
Key Concepts
- -- Ownership Cost
- The total costs associated with owning and maintaining equipment, including depreciation, insurance, taxes, and investment recovery.
- -- Operating Cost
- Costs incurred through the operation of equipment, such as fuel, oil, maintenance, and labor.
- -- Depreciation
- A method for allocating the cost of tangible assets over their useful life, often calculated using straight-line or declining balance methods.
- -- Caterpillar Method
- A widely adopted approach for estimating equipment costs based on standard parameters defined by the Caterpillar manufacturing company.
- -- Peurifoy Method
- A sophisticated approach to equipment cost estimation that incorporates the time value of money to provide accurate forecasts.
Additional Learning Materials
Supplementary resources to enhance your learning experience.