3.2. Operating Cost

Now the ownership cost is done it is more to the operating cost. So under operating cost we are going to discuss cost of consumable. Firstly, we will discuss about the fuel cost.

In this section, we are transitioning from discussing ownership costs to focusing on operating costs, specifically the costs associated with the consumables used in operations. One of the primary components of operating costs is fuel cost, which is essential for the operation of equipment.

Think of running a car. In addition to buying the car (ownership cost), you need to think about how much fuel you will need to drive it (operating cost). Just like a car, construction equipment consumes fuel to operate.

Fuel costs there are different handbook which provides you the information on the fuel consumption factor. Fuel consumption factor you can get it from different handbooks.

To estimate the fuel cost for operations, one can refer to various handbooks that provide information regarding the fuel consumption factor of specific equipment. This factor indicates how much fuel a machine will use under particular conditions, allowing for more accurate cost estimations.

Imagine if your car handbook specifies that your vehicle uses 30 miles per gallon under normal conditions. Similarly, the construction equipment's handbook will provide equivalent metrics for fuel efficiency, helping managers accurately predict how much fuel will be consumed for a project.

In that case they have given the hourly fuel consumption for the different models of machine directly you can get it hourly fuel consumption is provided for the different models of machine manufacture by them.

Manufacturers often provide detailed information about fuel consumption based on different models and operating conditions. This data can be directly accessed to find out how much fuel a machine will consume per hour, which is a critical component for calculating operating costs.

It’s like knowing how many gallons of gasoline you’ll use on a road trip. If you know your car’s efficiency is 25 miles per gallon and you plan to drive 100 miles, you can easily calculate how much fuel you will need.

Say for example the excavator if we take a particular model of excavator the different load condition, high load condition, medium load condition and low load condition. What is the hourly fuel consumption you can get the values from the caterpillar performance handbook.

The fuel consumption of construction equipment varies based on the load conditions it is operating under: high, medium, or low. The handbook provides specific consumption rates for these conditions, which can be crucial in estimating the overall fuel expenditure during a project.

Consider climbing a steep hill with a bicycle. It takes more energy (and thus more fuel if we compare it with a vehicle) than riding on flat terrain. Similarly, construction equipment uses different amounts of fuel depending on how hard it is working.

Another important thing is FOG is nothing but filter, oil, grease. So these are also the consumables which are consumed during the equipment operation.

FOG, which stands for filter, oil, and grease, represents a category of consumables that must be accounted for in operating costs. These items are essential for maintaining equipment during its operation and contribute to the overall efficiency and longevity of the machinery.

Similar to how a car needs regular oil changes and filter replacements to run smoothly, construction equipment requires FOG to ensure that it continues to operate efficiently without breakdowns.

So another thing to be calculate it is your tire cost it is nothing but your tire replacement by the estimate the life of tires in hours. So you can get it from your manufacture for different work condition for different terrains.

Tire costs can be significant components of operating costs, as they need to be replaced periodically based on their estimated lifespan, which varies according to usage conditions. Understanding these factors helps in planning and budgeting for ongoing costs in construction projects.

Think about how a car tire wears down faster on rough terrains compared to smooth roads. Similarly, construction equipment tires will have varying lifespans based on the environments they operate in.

So maintenance and repair of your machine excluding the tire cost.

In addition to consumables, one must also consider maintenance and repair costs for the equipment. These costs are calculated separately from tire costs and are crucial for ensuring that the machinery remains operational throughout its useful life.

Just as a car requires regular maintenance and occasional repairs to keep running well, construction equipment also needs similar attention to avoid breakdowns and ensure efficiency.

So now the total ownership and operating cost will be the sum of all the ownership cost components, operating cost components and in addition you have to add the operating wages...

To arrive at the total cost of operating construction equipment, one must sum up both the ownership costs and operating costs, including wages for operators. This thorough calculation ensures that all expenses are accounted for when budgeting for construction projects.

When budgeting for a project like building a house, you would not only account for the cost of the land and materials but also for the wages of the workers and the costs of running heavy machinery that they will use.

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