Construction equipment

CONSTRUCTION EQUIPMENT

CE-216Engr M Zeeshan Ahad

INU, CED

EQUIPMENT

INTRODUCTION

One problem an estimator faces is the selection of equipment suitable to use for a given project. The equipment must pay for itself. Unless a piece of equipment will earn money for the contractor, it should not be used.

INTRODUCTIONIt is impossible for contractors to own all types and sizes of equipment, the selection of equipment will be primarily from that which they own. However, new equipment can be purchased if the cost can be justified

For example, if a piece of equipment costing $15,000 will save $20,000 on a project, it should be purchased regardless of whether it will be used on future projects or whether it can be sold at the end of the current project.

INTRODUCTION

If the equipment is to be used for a time and then will not be needed again for a few weeks, the estimator should ask the following:

What will be done with it? Will it be returned to the main yard?

Is there room to store it on the project?

If rented, will it be returned so that the rental charge

will be saved?

Figuring the cost of equipment required for a project presents the same problems to estimators as figuring labour. It is necessary for the estimator to decide what equipment is

required for each phase of the work and for what length of time it will have to be used.

OPERATING COSTS

The costs of operating the construction equipment should be calculated on the basis of the working hour since the ownership or rental cost is also a cost per hour.

Included are items such as fuel, grease, oil, electricity, miscellaneous supplies, and repairs.

Operators’ wages and mobilization costs are not included in equipment operation costs.

OPERATING COSTS• Costs for power equipment are usually based on the horsepower of the

equipment. Generally, a gasoline engine will use between 0.06 and 0.07 gallons of gasoline per horsepower per hour when operating at full capacity• Fuel costs are calculated using Formula

OPERATING COSTS

When operating, the engine will probably operate at 55 to 80 percent of full capacity, or 55 to 80 percent of its available power will be utilized.

This is known as power utilization and reduces fuel consumption. In addition, it will not be operated for the full hour.

Typically, equipment is operated between 30 and 50 minutes per hour. This is known as the system efficiency or use factor and is expressed as a percentage of the hour that the equipment is operating.

For example, 45 minutes per hour would be 75 percent (0.75) and 50 minutes per hour would be 83 percent (0.83).

FUEL COST

What is the estimated fuel cost of a 120-horsepower pay loader? A job condition analysis indicates that the unit will operate about 45 minutes per hour (75 percent) at about 70 percent of its rated horsepower.

SOLUTION

LUBRICATIONThe amount of oil and grease required by any given piece of equipment varies with the type of equipment and job conditions.

A piece of equipment usually has its oil changed and is greased every 100 to 150 hours.

Under severe conditions, the equipment may need much more frequent servicing.

Any oil and grease consumed between oil changes must also be included in the cost.

TIRESThe cost of tires can be quite high on an hourly basis.

Because the cost of tires is part of the original cost, it is left in when figuring the cost of interest, but taken out for the cost of repairs and salvage values.

The cost of tires, replacement, repair, and depreciation should be figured separately.

The cost of the tires is depreciated over the useful life of the tires, and the cost of repairs is taken as a percentage of the depreciation, based on past experience.

DEPRECIATIONAs soon as a piece of equipment is purchased, it begins to decrease (depreciate) in value.

As the equipment is used on the projects, it begins to wear out, and in a given amount of time it will have become completely worn out or obsolete.

If an allowance for depreciation is not included in the estimate, there will be no money set aside to purchase new equipment when the equipment is worn out.

This is not profit, and the money for equipment should not be taken from profit.

DEPRECIATIONOn a yearly basis, for tax purposes, depreciation can be figured in a number of ways.

But for practical purposes, the total depreciation for any piece of equipment will be 100 percent of the capital investment minus the scrap or salvage value, divided by the number of years it will be used.

For estimating depreciation costs, assign the equipment a useful life expressed in years, hours, or units of production, whichever is the most appropriate for a given piece of equipment.

INTERESTInterest rates must be checked by the estimator.

The interest should be charged against the entire cost of the equipment, even though the contractor paid part of the cost in cash.

Contractors should figure that the least they should get for the use of their money is the current rate of interest.

Interest is paid on the unpaid balance. On this basis, the balance due begins at the cost price and decreases to virtually nothing when the last payment is made.

Since the balance on which interest is being charged ranges from 100 to 0 percent, the average amount on which the interest is paid is 50 percent of the cost.

OWNERSHIP COSTSTo estimate the cost of using a piece of equipment owned by the contractor, the estimator must consider depreciation, major repairs, and overhaul as well as interest, insurance, taxes, and storage.

These items are most often taken as a percentage of the initial cost to the owner.

Also to be added later is the cost for fuel, oil, and tires. The cost to the owner should include all freight costs, sales taxes, and preparation charges

Engr. Muhammad Zeeshan Ahad 27

DEPRECIATION METHOD• In this method of finding the value of the building, the method of

depreciation is used to find the value of the building.• This value is the value of the building at a particular life of a

building based on the percentage of depreciation at that age.• The total cost of the property is found when the cost of the land

is included in the value.• The formula for acquiring the value of the building through the

method of depreciation is as follow:D = p (100 – rd/100)^n


DEPRECIATION METHOD where

D = The Depreciated value of the building structure after n yearsP = cost of new buildingrd= fixed percentage of the depreciationn = Present age of the building


DEPRECIATION METHOD• The value of the fixed percentage of depreciation (rd) for different duration of life

of a building is as under

Life of Building Value of rd

100 1.00

75 1.25

50 2.00

25 4.00

20 5.00


DEPRECIATION METHOD• Example : Determine the present value of a property having a land area of

250 sq.m. life of the building is 20 years. Plinth area 175 sq.m @ Rs.2000/sq.m

• Solution Plinth area = 175 sq.mRate of construction = Rs. 2000/sq.mcost of new Building = P = 175 * 2000 Rs.3,50,000life of building = n = 20 yearsPercentage of Depreciation = rd = 5.00


DEPRECIATION METHOD depreciated value of building = D = p (100 – rd/100)^n

=D = 350000 (100 – 5.00/100)^20=Rs. 1,25,470/-

End of Lecture

Construction equipment

Engineering

Transcript of Construction equipment