Mumbai University > Civil Engineering > Sem 8 > Construction Engineering

Marks: 10Marks

Owning Cost: It is made of up of following cost:

1. Investment Cost.

2. Depreciation Cost.

3. Major Repair Cost.

Investment Cost: It is a kind of fixed cost and continues to be incurred whether the equipment is used or not. The investment cost comprises of the following:

Interest on the money invested in the procurement of the equipment.

Various taxes on equipment.

Insurance Expenses.

Storage costs:

The Investment cost are taken as about 10 to 15 % of the total cost of the equipment. The total cost comprises of the following.

F.O.B. price of the equipment with all attachments accessories.

Insurance and freight changes.

Expenses on unloading, clearance and custom duty.

Cost of transportation to the job site including loading and unloading.

Errection and Commisioning Charges.

Depreciation Cost:

Depreciation Cost:

Whenever any machine or equipment perfoms useful work its wear and tear is bound to occur. This can be minimized upto some extent by proper care and maintenance but can’t be totally pre. Its efficiency also reduces with the lapse of time and at one time it becomes uneconomical to be used to and need replacement by new units. This amount is deducted yearly from the profits and kept separately to have sufficient money for replacement at end of useful life.

Obsolescence:

Suppose a contractor purchases a machine for his production but after some duration a better machine comes in the market, whose production rate is very high and is more economical.. Although the old machine is efficient but becomes out of fashion and uneconomical due to the new better machine which has come in the market. This is knows as Obsolescence.

Major Repair Costs:

While minor or field repairs are carried out during the day to day working of the equipment the major repairs are carried out after the substantial use of the equipment. Major repairs and over hauls are the replacement of major parts of the equipment because of excessive was through a long period of use. Since these repairs require a heavy amount of expenditure they are met from the major repair fund. The major repair cost is spread out during the entire life span of equipment.

Operating Cost:

It consist of following

1. Cost of Fuel (or Power).

2. Cost of Lubricants.

3. Servicing and Maintenance Cost.

4. Labor Cost.

5. Cost of Field Repairs.

6. Various other Overheads.

Cost of Fuel: The actual consumption of fuel or electricity in these construction equipment depends upon

Engine B.H.P.

The load factor, which means the extent to which the engine will operate at full power load factor generally vary from 30% to 70%.

The conditions of the engine.

Cost of Lubricants:

Lubricants include the following:

i. Engine oil.

ii. Air filter oil

iii. Transmission oil

iv. Hydraulic oil

v. Greases oil.

The quantity of lubricating oil depends upon various face. Some of these factors are:

Capacity of the crank case.

Condition of piston

Number of hours between oil charges.

This depends on operating conditions and the manufacturer’s recommendation.

Servicing and Maintenance Cost:

Regular servicing and maintenance of each equipment is very essential in order to have the equipment in reliable and perfect conditions of working. This cost includes:

i. Change of lubricants.

ii. Checking and servicing of fuel and lubricants system including change of filter elements.

iii. Care of tyres and tubes.

iv. Care of battery and electrical system.

v. Cleaning of the equipment and other similar works.

vi. Salaries of staff engaged on maintenance and servicing.

Labor Cost:

It is an important element of operating cost and contributing a major part of it. Labor cost element includes the salaries of operators and helpers engaged on equipment. Provisions for leave reserves /may vary from 10 to 12% are also made under the head of labor cost.

Cost of Field Repairs :

This is the cost incurred on minor repairs which are carried out on the side or in field workshops. These include replacement of minor parts, such as fan belts, filters, bearings, wire ropes etc and other adjustments required to be carried.out during normal working of the equipment.

Overheads:

These are the charges which are incurred complete fleet of equipment. Therefore proportional expenditure is booked under this head on each equipment. These charges include the pay on watchman, light and water charges in storage yards,uniform to the operating and maintenance staffed.