3.4. Repair Cost Calculation

So just add up everything the ownership cost all the operating cost and operating wages also you will get the total ownership and the operating cost following the Peurifoy guidelines.

To estimate the total cost of operating equipment, you need to combine several expenses, including ownership costs (like depreciation), operating costs (fuel, maintenance, etc.), and the wages of operators. This approach adheres to the Peurifoy guidelines and provides a comprehensive view of what it costs to use a piece of equipment.

Think of it as running a small business. You would consider all your expenses: rent (ownership cost), utilities (operating cost), and employee salaries (wages). Just like you total all these expenses to know how much money you need each month, you do the same for equipment usage.

This truck is not permitted on the public highways. It is an; heavy equipment high end equipment you can see that these trucks will be operated only in the project sites.

Off-highway trucks are specialized vehicles that cannot be driven on public roads. Used primarily on construction or mining sites, these trucks are designed for heavy-duty tasks and feature enhanced capabilities. Understanding their operations is crucial for accurate cost estimation since they generally have unique pricing and maintenance needs compared to regular trucks.

Imagine construction sites where only specific heavy machinery can operate, similar to how certain sports facilities have equipment suited only for that sport. Just like a basketball court isn't suitable for soccer, off-highway trucks aren't allowed on regular roads.

The initial cost is given so it was purchased with the delivery price of 3 crores. The tire cost of this machine is 11 lakhs.

To calculate ownership costs, start with the initial purchase price of the equipment, which is 3 crores in this case. Then subtract the tire cost (11 lakhs) to focus on the other cost components related to the truck. This forms the basis for further calculations related to depreciation and operating costs.

It's like buying a car: the purchase price includes the car's cost, and if you consider its maintenance, you might separate out the cost for tires or special features to understand how much you shell out after the initial payment.

The other associated cost are the interest rate which is nothing but 8% insurance 2% and taxes 3%.

Ownership costs also include various financial factors such as interest on loans (8%), insurance (2%), and taxes (3%). These costs contribute to the overall expense of maintaining the equipment and must be factored into total cost calculations to avoid unexpected expenses.

This can be compared to owning a house where, apart from the mortgage (interest), you also pay for property insurance and taxes. Just like you wouldn't solely consider your mortgage payment, you have to include these additional costs for a clear view of your total investment.

So the depreciation is done to 0 value you can say that it is nothing but initial price minus tire cost minus salvage value.

Depreciation is a way to account for the loss of value of an asset over time. In this case, it's calculated by taking the initial price, subtracting the cost of tires and assuming a salvage value of zero. This helps determine how much value the equipment loses each year, which must be included in the overall operating costs.

Imagine you buy a brand new smartphone. Over time, it loses value due to wear and tear and newer models being released. Just like tracking that depreciation can help you decide when to sell or upgrade, it's the same for equipment.

P(n+1)+S(n−1) / 2n.

To find the average annual investment, you can use a formula that incorporates the purchase price without the tire cost and divides it by the number of years you expect to use the equipment. This average cost per year helps in budgeting and planning for future expenses.

Think of it like budgeting for a car—you would estimate how much money you put aside each year for repairs and operating costs, and this provides a clearer picture for your total expenditures over time.

The hourly equipment fuel cost as rupees 1462.5... Add everything, you will get the total operating cost as rupees 3209.29 per hour.

Operating costs involve calculating various expenses like fuel consumption, maintenance supplies (such as oil and grease), tire costs, and repair costs. Each of these components contributes to the overall operating expense. By adding these figures together, you derive a total cost per hour for running the equipment.

It's like running a household: you budget for groceries, utilities, and maintenance. Each spending category contributes to your overall monthly expenses, which is necessary to understand how much money you need each month.

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