4.1. Total Equipment 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. Now let us workout from examples on how to estimate the equipment cost using these 2 methods.

In this section, we're discussing how to calculate the total equipment cost, which involves adding together several key components including the ownership costs, operation costs, and wages associated with operating the equipment. The method referenced, the Peurifoy guidelines, provides a framework for accurately estimating these costs through examples.

Think of this calculation like budgeting for a vacation. Just as you would consider airfare, hotel, meals, and activities, when calculating equipment costs, you need to account for ownership, operation, and wage costs to understand the total expense involved.

You can see this problem in this problem you can estimate the cost for the dump truck. It is an off-highway truck. Why do we call it as off-highway? This truck is not permitted on the public highways...special features like you can see it will be kind of articulate machine with any additional features are there with this dump truck that is why you can justify its cost.

In this part, the focus shifts to a specific example: an off-highway dump truck. These trucks, designed for heavy-duty operations, cannot operate on public roads and are typically used at project sites. Their high costs can be attributed to their specialized features and capabilities tailored for tough environments.

Imagine buying a specialized vehicle like a bulldozer that is made for construction. Just as this vehicle would cost more than a regular car because of its added features and capabilities, the dump truck's costs are justified based on its unique specifications.

The requirements are according to the type of the machine for which you are going to estimate. You can choose the appropriate estimation handbooks and choose the values estimated accurately. These numbers are just approximate assumptions just to show the methodology of how to estimate the economic cost.

The cost estimation process involves using appropriate handbooks tailored to specific types of machines to derive accurate values. While some numbers presented in the example may be approximations, the intention is to demonstrate the approach and methodology behind estimating economic costs for equipment.

If you were estimating the cost of a new computer, you would reference a technology price guide to ensure your numbers reflect current market values. Similarly, those estimating equipment costs will refer to established resources to guide their calculations.

The truck is expected to have an annual use of 1600 hours...the local cost of the fuel in the particular space is 65 rupees per liter and the operating cost the wages per hour is 200 rupees per hour.

To accurately calculate total equipment costs, it's crucial to understand usage parameters, including how many hours the truck operates per year (in this case, 1600) as well as costs related to fuel and wages. These elements significantly impact operational budgeting and should be factored into calculations.

Consider how often you utilize a gym membership. If you go regularly, costs per visit can decrease in terms of value, much like how frequent use of a piece of equipment lowers the effective cost per hour of operation.

Now we shall calculate the depreciation. Depreciation = (Initial price - Tire cost) / Useful life.

Depreciation is discussed in terms of how to calculate it based on the initial cost of the equipment minus any specific costs, like tires. Here, the useful life of the equipment is used as a timeframe over which its cost will be spread out. This helps spread the cost of the machine over its expected lifespan.

Imagine buying a car for $20,000 and predicting it will last for 10 years. You may consider that$20,000 cost in your annual budget as though it depreciates, allowing you to understand how much value you're losing each year.

Total hourly ownership cost = 1445 + 780.30 + 195.08 + 292.61 = ₹ 2713.00/hr.

After all components including depreciation, interest, insurance, and taxes are calculated and added together, you arrive at the total hourly ownership cost. This total helps users understand what it costs to own and operate the piece of equipment per hour.

This is similar to calculating the total cost of ownership of a vehicle. You'd add up monthly payments, insurance, fuel, and maintenance to understand how much it really costs to own that vehicle each month.

Now let us move on to the operating cost estimation...All these things if you add, you will get your total hourly operating cost as rupees 3209.29 per hour.

This section discusses estimating operating costs, which are distinct from ownership costs. Key components of operating costs include fuel consumption, maintenance (like FOG costs), and tire wear, which together inform the overall operational expense of using the equipment hourly.

Think of these costs like running a household. You would tally grocery bills, utility costs, and maintenance expenses to find out the total monthly expenditure—similarly, equipment operating costs give a detailed look at hourly expenditures for efficient planning.

Total cost = ₹ 6122.29/hr.

By summing up all the computed hourly ownership, operating costs, and any other expenses (like operator wages), one arrives at the total cost of using the equipment. Understanding this total is essential for project budgeting and resource allocation in construction contexts.

Much like when planning a wedding, you would calculate costs from venue, food, attire, and other expenses to understand the total budget required. Similarly, in this case, one must add everything up to understand the project's financial planning.

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