09-12 October 2016 - Rio de Janeiro - Brazil

COSTS ANALYSIS OF CONSTRUCTIONS HEAVY

EQUIPMENT
Msc. Bruno Costa Chaves
Universidade Federal de São João del Rei, 32 98514-0053, e-mail: brunobh84@gmail.com

Silvana Facion dos Santos

Universidade Federal de São João del Rei, 32 98490-9719, e-mail: silvanafacion@gmail.com

ABSTRACT

This paper presents an analysis of the various costs related to equipment used in heavy
construction in order to obtain the hourly operating cost of the equipment, parameter used to
evaluate the productivity and viability of equipment for machine rental companies. The value of the
hourly cost was obtained by calculating the values of the cost of property (𝐶𝑃 ), operating costs (𝐶𝑂 ),
administrative cost (𝐶𝐴𝐷𝑀 ) and nonproductive cost (𝐶𝑁𝑃 ).. In this study were evaluate: two (02)
hydraulic excavators (New Holland E215, Caterpillar 320-C), two (02) wheel loaders (Volvo L60F,
Caterpillar 924G) and three (03) motor graders (New Holland RG170B, Caterpilllar 140M, Volvo
940G). The idea of using the equipment cost is very useful for machinery rental companies so that
they can define rental price and also for construction companies to monitor the monthly cost of
each unit, assessing their productivity and viability for the company. As a result, is possible to
conclude that the hydraulic excavator 320C and the E215B had the same result, due to high
number of hours worked in the moth. The New Holland motor grader had a better result in
comparison with motor grader obtained the lowest cost and the Caterpillar wheel loader obtained
de lowest cost. It is important to say that the age and the worked hours of equipment interfere
directly in the results.

Keywords: cost, equipment, machinery, construction,

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Costs analysis of construction heavy equipment 2

1 INTRODUCTION

In the construction segment, obtaining cost parameters, in order to serve as a benchmark for
road works tenders and to obtain the total cost is essential for companies and agencies.
However, it is necessary to consider that the tasks involved in the process of estimating costs
are extremely laborious and time consuming and therefore costly.
According to DNIT (2003), calculating the costs of the road services requires knowledge of
hourly operating cost of the equipment used in its execution. Thus, it is necessary to establish
criteria that define how the different components of that cost will be considered.
According to Dias (2002), for the realization of a work are needed a lot of equipment that
can be used in the execution of the work, being necessary to choose the most appropriate
equipment to perform a certain task. The other way is the ability to resource the use of equipment
that determines the degree of work mechanization, a critical factor today to the execution of a work
in the best conditions of time and cost.
There are several types of construction equipment, being selected according to the work to be
performed, comprising:
 earthmoving equipment;
 lifting equipment and material handling;
 manufacturing equipment and placement of concrete and mortar;
 Cutting equipment and steel folding.
Over the life of equipment in service, the owner and the operator (who may or may not be
identical) make a variety of outlays. The owner pays the purchase price, plus any costs of delivery
and preparation for service, before the equipment enters service. Once the piece is put into
service, its use entails ongoing outlays for replacement parts, labor, fuel, and lubricants.
Depending on the type of equipment, outlays for other elements such as tires or hydraulic fluid may
also occur. When the owner disposes of the equipment, he or she may realize a resale price, net
of disposal costs that will offset some fraction of the costs incurred up to that point. (Gillespie,
2004).
During its use, a piece of equipment provides a stream of services, or benefits. The benefits
may be counted in miles of travel, hours of operation, days of service, or some other unit of
measurement, depending on the nature of the service.
The historical record of costs incurred and the historical record of services obtained from a
piece of equipment permit the calculation of the equipment’s life cycle cost. When the costs
incurred on each day of a machine’s service life are appropriately time discounted—“translated,” so
to speak, into the prices of the current year—they may be summed.
The life cycle cost of an owned piece of equipment, charted as a function of time, tends to
have a U shape; i.e., the cost per unit of service declines during the early years of operation,
bottoms out, and then begins to rise. One component of unit cost, the average fixed cost, is equal
to the price divided by the number of units of service (be they hours of operation, miles of travel, or
months of ownership); it declines at a steadily decreasing rate. The other component of unit cost,
the average variable cost, is equal to the cumulative lifetime costs of operation, maintenance, and
repairs, plus depreciation (in the sense of a reduction in the equipment’s resale value); after a
(possible) initial decline, it levels off and then inclines at a steadily increasing rate. The total
average cost per unit of services obtained will decline initially as the up-front cost of purchase is
distributed over a larger number of units of service, but beyond some point, the average cost per
unit of services will begin to rise as the parts, labor, and fuel expenses required to keep the piece
running creep upward.
Tractors and equipment costs are calculated in two major groups: fixed costs and variable
costs, according to Mialhe (1974); Mochón; Troster (1994). In more recent literature, machine costs
can be divided into costs arising from machines property and costs arising from its operation. In
general, fixed costs are associated with the machines properties and include the following items:
depreciation, interest, accommodation, insurance and maintenance. According to Cosentino
(2001), depreciation can be determined by various methods; the most common are the linear
method, exponential method, the digit sum method, by proportional quotas of working hours and
the constant rate summation method. Interest is determined on the basis of the acquisition value of
the machine and the prevailing interest rate in the market. Other items are determined based on
different methodologies for determining. Variable costs relate to expenditures on factors of
production variables, they are generally associated with operating costs and consist of the following
expenses: fuel, filters, lubricating oils, greases, hand labor, repairs and maintenance and vary
according to the degree of use of these machines. From this general categorization of machines
cost several methodologies have been proposed, like Mialhe (1974); Asae (2002). Besides
Costs analysis of construction heavy equipment 3

diversity methods for costing, Fairbanks;Larson; Chung (1971) in research with 114 farmers in
Kansas (USA), found it difficult to estimate the total cost of machines due to the extreme variability
in conditions and ways of operating in the field.
Figure 1 plots average total cost versus number of units of service for an idealized piece of
equipment. The average total cost curve has the typical U shape. The separate fixed and variable
average cost components also appear with their typical shapes. Figure 1 also shows the marginal
cost curve. Marginal cost is the incremental cost of obtaining one more unit of service. In the early
years of operation, when additional use incurs a cost per unit of service smaller than the lifetime
average to date, additional operation brings the lifetime average cost lower. In the later years of
operation, when additional use incurs a cost per unit of service greater than the lifetime average to
date, additional operation brings the lifetime average cost higher.

Figure 1 Cost relationships postulated for typical piece of equipment

The following expenses are considered for calculating the hourly cost of heavy equipment:
 Porperty costs: Depreciation, capital opportunity cost, insurance and taxes.
 Operating costs: Maintenance, undercarriage/tires, wear parts (sharp edges, bucket teeth,
penetration tool), fuels, lubricants
 Administrative costs: hand labor.
The hourly cost of equipment is the total cost of ownership, maintenance and operation
referred to the unit of time (hour). It is used for the calculation of unit costs of the services that the
machine produces, obtained the following relationship:

Hourly cost of equipment

Unit cost produced by equipment =
Hourly production of equipment
(1)
2. METODOLOGY

2.1 Property Costs

The property costs’ arising from equipment loses in value with the passage of time is
unavoidable, regardless of the activity of the equipment. Therefore, when a manufacturer makes an
investment in the acquisition of equipment, the value of replacement investment should be charged
for each service in which such equipment is used and collected for the safe of the company,
because the owner could be having profitability through financial investment in a bank. The hourly
rate charged to recover the amount invested is called hourly depreciation.
In general terms, depreciation is considered the portion of operating costs related to detrition
and obsolescence of equipment that occur throughout its life. Mattos (2007) said that depreciation
can be defined as the reduction in the account value of the asset. The value of the equipment,
however, begins to depreciate from the moment it is delivered to the buyer, and the devaluation
continues due to numerous factors, such as age, time of use, detrition and obsolescence.
Thus, the equipment total value is the difference between the price of new equipment and the
residual value it still has at the end of its useful life (DNIT, 2003). Therefore, the inclusion of
depreciation as cost share has the function to generate a fund, so that at the end of the useful life
of the equipment the value of the fund added to the residual value of the equipment is sufficient for
the acquisition of new equipment, equal to that which was being removed from the production line.
Costs analysis of construction heavy equipment 4

This concept is important in the sense of avoiding the depreciation for the use (i.e., related to the
number of hours that the equipment provides effective services) of other two concepts that do not
apply in the case of calculating their hourly cost: chronological age equipment and depreciation for
accounting purposes, regulated by specific legislation. Therefore, the calculation of depreciation for
costing effect depends on some parameters such as useful life, value of purchase of new
equipment and residual value, and also the shape defining how to allocate this cost to the
operating cost per hour.
The equipment acquisition values, to be used in the calculation of its hourly cost, will always
correspond to the manufacturers of quotations or large retailers on new equipment for cash sale,
comprising in its value the tax burden on them focuses (ICMS and IPI).
When you want to assign to the residual value of the equipment a percentage of their
acquisition value, it appears that the used machinery market distinguishes types of equipment and
brands. There are some more acceptance and demand, other less sought after and even the null
immediate interest. There are also changes in value for the area where you want to negotiate.
Certain equipment, mainly small, the end of its useful life, has only value of scrapped. These
factors are dynamic and vary over time. With support in DNIT Research (2003), adopted the
following percentages of the equipment purchase to estimate their residual value:

Table 1 Equipment’s residual value.

Equipment Type Residual rate r (%) Equipment Type Residual rate r (%)
Dump truck 20,0 Asphalt plant 10,0
Concrete-mixer truck 20,0 Air compressor 15,0
Wheel loader 20,0 Crushing machine 10,0
Hydraulic excavator 20,0 Tractor 20,0
Motor grader 20,0 Setgen 15,0
Backhoe 20,0 Road roller 15,0
Bulldozer 20,0 Vibrating roller 10,0

Mathematically, the calculation of hourly depreciation can be done linearly, by dividing the
difference between the acquisition value (VA) and the residual value (VR) for the life of the
equipment expressed in hours, just like the equation (2).

VA − VR
DH =
H
(2)

Where,
DH = Hourly depreciation
VA = Acquisition value
VR = Residual value
H = Life cycle in hours

The residual value is obtained by multiplying the acquisition value by the residual rate,
according to the equation (3).

VR = VA × r
(3)
Where,
r= residual rate

The produces have standard values to calculate the life cycle in hours using the life cycle
in year and the years estimated for the equipment, some values are showing in table 2.
Costs analysis of construction heavy equipment 5

Table 2 Equipment life cycle

Equipment Life Cycle (years) Life Cycle (hours per year)

Hydraulic Excavator 10 170
Motor grader 10 150
Wheel Loader 10 150

When the builder invests in the purchase of equipment, he is providing an amount of

money that could be applied in the financial market, generating interest. Therefore, the cost of
ownership of equipment, according to Mattos (2006), should take into account the corresponding
interest income that the investment would generate over its lifetime. The calculation of interest is
based on the average investment concept, and its calculation follows below:

VM = 𝑉𝐴 − (𝑉𝐴 × 𝑖 × 𝑦)
(4)
Where,
VM = Market value
i= interest rate (devaluation rate)
y= actual age of the equipment in years

It is worth remembering that, consider the cost of the capital invested, as remuneration this
factor of production, does not mean you should compute them to market interest levels at the end
of the capture. The fair criterion would pay him for his opportunity cost, i.e., the average level of
income that this capital could obtain similar risk conditions. As, however, it would be extremely
difficult to define what could be considered a condition similar risk, can be taken as a reference
low-risk options presented by the market, which offset lower rates with the security of the
application. In this case it is considered investments in savings accounts, whose income is given to
the nominal rate of TR plus 6% per year; where TR comes as inflationary component and 6% as
real income. As road costs are calculated monthly, values already embody the inflationary effect.
Thus the simple application of the rate i = 6% per year on permanently adjusted basis would
actually promoting that remuneration.
The market value is used as a reference to the current value of the equipment after use
and devaluation. In this case the interest rate used is 12% per annum, and the calculation can be
done using financial mathematical notions for calculating payments.
Mendonça et al (2010) presents a method to calculate the value of equal payments (PMT),
equivalent to the present value (PV) in the case of n payments in arrears, at a given interest rate.
The equation (4) presents a formula to calculate the PMT.

(1+𝐼)𝑛 𝐼
PMT = PV × [ ]
(1+𝐼)𝑛 −1
(5)

Where,
PMT = payment
PV = present value (market value)
n = life cycle
I = interest rate

To find the value of the property hourly cost simply divide the PMT found by the amount of
hours that the equipment works on average in the month (Table 2 value multiplied by 12).

𝐶𝑃 = 𝑃𝑀𝑇 × 𝑚

Where,
CP= property cost
m = worked hours per month
Costs analysis of construction heavy equipment 6

2.2 Operating Cost

Operating costs involve fuel, lubricants, desgate parts, undercarriage, tires and
maintenance.
Manufacturers provide hourly fuel consumption rates for three engine load conditions: low,
medium and high. But it is noticed in the field is wide variation in these values, because the
consumer will depend on the working condition.
For the default value of fuel consumption is important to consider three motor
characteristics of the equipment: power (HP), maximum rotation speed (rpm) and torque.
DNIT (2003), shows the average diesel consumption of 0.151 l / HP in equipment with
lower power to 200 HP and 0,164 l / HP equipment with power more than 200 HP.
Therefore, the fuel consumption in liters per hour can be calculated according to equation
(5).

𝑇
𝑐 =𝑃×( )×𝑓
𝑅𝑜𝑡
(6)
Where,
C = fuel comsuption
P= motor power
T = Torque
Rot = maximum rotation per minute
f= factor (0,151 or 0,164)

The cost of fuel is then calculated by multiplying the consumption by the current value of
the diesel. According to ANP (2016), the current value of diesel liter is R $ 2.96. Equation (6)
shows the fuel cost calculation.

𝑐𝑐 = 𝑐 × 2,96
(7)
Where,
Cc= fuel hourly cost.

For the owner to estimate the lubricating oil consumption is necessary to use to operation
and maintenance manuals of the equipment manufacturer, it must obtain the capacity of the engine
oil reservoir, transmission and hydraulic. Besides this information it is also necessary to know the
period of oil change, according to the maintenance plan adopted. It is advised to follow the
manufacturer's instructions.
With this information is obtained a coefficient of relationship between the capacity of the
reservoirs and oil exchange time from equation (7).

𝑀𝑜𝑡𝑜𝑟 𝑣𝑜𝑙𝑢𝑚𝑒 𝑇𝑟𝑎𝑛𝑠𝑚𝑖𝑠𝑠𝑖𝑜𝑛 𝑣𝑜𝑙𝑢𝑚𝑒 𝐻𝑦𝑑𝑟𝑎𝑢𝑙𝑖𝑐 𝑣𝑜𝑙𝑢𝑚𝑒

𝐶𝑜𝑒𝑓 = ( + + )
𝑀𝑜𝑡𝑜𝑟 𝑜𝑖𝑙 𝑐ℎ𝑎𝑛𝑔𝑒 𝑇𝑟𝑎𝑛𝑠𝑚𝑖𝑠𝑠𝑖𝑜𝑛 𝑜𝑖𝑙 𝑐ℎ𝑎𝑛𝑔𝑒 𝐻𝑦𝑑𝑟𝑎𝑢𝑙𝑖𝑐 𝑜𝑖𝑙 𝑐ℎ𝑎𝑛𝑔𝑒
(8)
After obtaining the oil consumption coefficient must multiply it by the average value of the
lubricating oil liter, according to equation (8). In this case we used R$ 7.00 (ANP, 2016).

𝑐𝐿 = 𝑐𝑜𝑒𝑓 × 7,00
(9)
Where,
CL= lub consuption.

Maintenance costs involve maintaining itself - cleaning activities, cleaning, inspection,

adjustment, calibration, adjustment, retouching, retightening and routine replacement of parts - and
repairs - repair or replacement of parts and damaged parts, defective or broken. In this method, the
cost of maintaining CM considers the number of hours that the machine has been used, and
tabulated coefficients called repair factors. Maintenance schedules cost used by the DNIT (2003)
are obtained through the expression:
VA ×K
𝐶𝑀 =
H
Costs analysis of construction heavy equipment 7

(10)
CM= Maintenance hourly cost (R$/h)
VA = Acquisition value (R$)
H = Life cycle in hours
K = Maintenance coefficient
.
The table 3 presents the K values (DNIT, 2003).
Table 3 Maintenance coefficient (DNIT, 2003)

Equipment Type Coefficient K Equipment Type Coefficient K

Dump truck 0,9 Asphalt plant 0,9
Concrete-mixer truck 0,9 Air compressor 0,8
Wheel loader 0,7 Crushing machine 0,6
Hydraulic excavator 0,9 Tractor 0,7
Motor grader 0,9 Setgen 0,5
Backhoe 0,7 Road roller 0,7
Bulldozer 0,9 Vibrating roller 0,8

Another important point in the composition of the operating cost is the cost of wear
material, according to DNIT (2003) is equivalent to 0.5% of the acquisition value of the equipment.
Therefore, to obtain the hourly cost of the wear material is sufficient apply the equation (11).

0,5% × 𝑉𝐴
𝑀= 𝐻
( )
𝑛
(11)
The devices differ between track equipment (eg hydraulic excavator) and tire equipment
(motor grader, wheel loader).
To calculate the track hourly cost was presented a factor of 5.00% of the acquisition value
of the equipment (DNIT, 2003), obtaining the approximate value of each track of the equipment.
In the case of tire equipment, it is sufficient to use the purchase price of the tire.
The calculation of the undercarriage cost per hour follows the equation (12).

(𝑈𝑛𝑖𝑡 𝑣𝑎𝑙𝑢𝑒 × 1,6)

𝑈 = 𝑎𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝑡𝑖𝑟𝑒𝑠 𝑜𝑟 𝑡𝑟𝑎𝑐𝑘𝑠 ×
𝑀𝑎𝑡𝑒𝑟𝑖𝑎𝑙 𝑙𝑖𝑓𝑒 𝑐𝑦𝑐𝑙𝑒
(12)
For this calculation, DNIT (2003) proposes using a conversion factor of 1.6 in the unit value
and useful life of 4000 hours to track and 600 hours for tires.
Finally, it should be taken into account the costs related to safe and IPVA equipment, DNIT
(2003), we used 1% of the market value to perform the calculation represented by equation (13).

𝑉𝑀 × 0,01
𝐼𝑃𝑉𝐴 = 𝐻
𝑛
(13)

2.3 Administrative cost

The administrative cost involves the operator wage base, overtime performed and charges.
In this article it is assumed that there will be no extra work.
According SICEPOT (2016), the hourly base salary for operators of equipment with motor
power below 150 HP is R$ 12.00 and equipment with motor power over 150 HP is $ 16.00.
The social cost is calculated by multiplying the base salary by 125% (MTE, 2016). So to
get the final administrative cost just add the wages to the social burden.

𝐶𝐴𝐷𝑀 = 𝑆𝑎𝑙𝑎𝑟𝑦 + (𝑆𝑎𝑙𝑎𝑟𝑦 × 125%)

(14)
Costs analysis of construction heavy equipment 8

3. RESULTS

This study analyzed the monthly hourly costs relating heavy equipment bellow, presented in
Table 3.

Table 3 Equipment specifications

ID Description Producer Type Motor(hp) Acquisition Value Date

HE-01 Hydraulic New E215 150 R$ 494.654,00 2010
Excavator Holland
HE-02 Hydraulic Caterpillar 320C 138 R$ 636.474,00 2005
Excavator
WL-01 Wheel Volvo L60F 156 R$ 375.804,00 2009
Loader
WL-02 Wheel Caterpillar 924G 105 R$ 373.314,00 2008
Loader
MG-01 Motor New RG170B 170 R$ 530.772,00 2010
grader Holland
MG-02 Motor Caterpillar 140M 183 R$ 789.266,00 2008
grader
MG-03 Motor Volvo 940G 221 R$ 664.965,00 2008
grader

According to the information and equations presented previously and data obtained in the
operation and maintenance manual of the manufacturers (CATERPILLAR, 2008; VOLVO, 2008,
NEW HOLLAND, 2010; CATERPILLAR 2005; VOLVO, 2009) costs were obtained according to
Tables 4 5, 6, 7.

Table 4 Composition of the property cost

ID VR VM PMT CP Dh
HE-01 R$ 98.930,80 R$ 316.579 R$ 87.545,92 R$ 42,91 R$ 19,40
HE-02 R$ 127.294,80 R$ 216.401 R$ 112.645,82 R$ 55,22 R$ 24,96
WL-01 R$ 75.160,80 R$ 217.966 R$ 66.511,36 R$ 36,95 R$ 16,70
WL-02 R$ 74.662,80 R$ 194.123 R$ 66.070,67 R$ 36,71 R$ 16,59
MG-01 R$ 106.154,40 R$ 339.694 R$ 93.938,24 R$ 52,19 R$ 23,59
MG-02 R$ 157.853,20 R$ 410.418 R$ 139.687,58 R$ 77,60 R$ 35,08
MG-03 R$ 132.993,00 R$ 345.782 R$ 117.688,27 R$ 65,38 R$ 29,55

Table 5 Composition of the operating cost.

ID Cc CL CM M U IPVA CO
HE-01 R$ 46,93 R$ 1,93 R$ 21,82 R$ 1,21 R$ 6,18 R$ 1,55 R$ 79,62
HE-02 R$ 44,86 R$ 1,87 R$ 28,08 R$ 1,56 R$ 7,96 R$ 1,06 R$ 85,39
WL-01 R$ 33,35 R$ 1,47 R$ 14,61 R$ 1,04 R$ 2,99 R$ 1,21 R$ 54,67
WL-02 R$ 22,45 R$ 1,44 R$ 14,52 R$ 1,04 R$ 2,99 R$ 1,08 R$ 43,52
MG-01 R$ 55,26 R$ 2,62 R$ 26,54 R$ 1,47 R$ 2,24 R$ 1,89 R$ 90,02
MG-02 R$ 44,99 R$ 3,23 R$ 39,46 R$ 3,95 R$ 2,24 R$ 2,28 R$ 96,15
MG-03 R$ 56,20 R$ 3,56 R$ 33,25 R$ 3,32 R$ 2,24 R$ 1,92 R$ 100,49
Costs analysis of construction heavy equipment 9

Table 6 Composition of the administrative cost

ID CADM
HE-01 R$ 34,94
HE-02 R$ 34,94
WL-01 R$ 52,80
WL-02 R$ 39,60
MG-01 R$ 52,80
MG-02 R$ 52,80
MG-03 R$ 52,80
Table 7 Composition of the total cost
ID CP CO CADM CT
HE-01 R$ 42,91 R$ 79,62 R$ 34,94 R$ 157,47
HE-02 R$ 55,22 R$ 85,39 R$ 34,94 R$ 175,55
WL-01 R$ 36,95 R$ 54,67 R$ 52,80 R$ 144,42
WL-02 R$ 36,71 R$ 43,52 R$ 39,60 R$ 119,83
MG-01 R$ 52,19 R$ 90,02 R$ 52,80 $ 195,01R
MG-02 R$ 77,60 R$ 96,15 R$ 52,80 R$ 226,55
MG-03 R$ 65,38 R$ 100,49 R$ 52,80 R$ 218,67

4. DISCUSSION

Figures 2, 3, 4, 5 shows the comparison between the costs obtained for each equipment

Figure 2 Propety Cost

Property cost
R$90,00 R$77,60
R$80,00
R$65,38
R$70,00
R$55,22 R$52,19
R$60,00
R$50,00 R$42,91
Cost

R$36,95 R$36,71
R$40,00
R$30,00
R$20,00
R$10,00
R$0,00
HE-01 HE-02 WL-01 WL-02 MG-01 MG-02 MG-03

Equipment

Looking at Figure 2 you can see that the MG-02 machine has the highest cost of property,
which can be explained by the fact that it contains the highest amount of acquisition value.
Because possess the lowest acquisition value the WL-01 and WL-02 equipment had the lowest
cost of ownership.
Costs analysis of construction heavy equipment 10

Figure 3 Operating cost

Opreating cost
R$120,00
R$90,02 R$96,15 R$100,49
R$100,00 R$85,39
R$79,62
R$80,00
R$54,67
Cost

R$60,00
R$43,52
R$40,00

R$20,00

R$0,00
HE-01 HE-02 WL-01 WL-02 MG-01 MG-02 MG-03

Equipment

The MG-03 machine had the highest operating cost in this analysis because it had a high
consumption of fuel and the second largest maintenance cost.
Highlighted as the lowest operating costs WL-02 features low fuel consumption and low
maintenance cost.

Figure 4 Administrative cost

Administrative cost
R$60,00 R$52,80
R$52,80 R$52,80 R$52,80

R$50,00
R$39,60
R$40,00 R$34,94 R$34,94
Cost

R$30,00

R$20,00

R$10,00

R$0,00
HE-01 HE-02 WL-01 WL-02 MG-01 MG-02 MG-03
Equipment

Because of having the highest wages, the WL-01 equipment, MG-01, MG-02, MG-03 were
with the highest administrative cost compared to the HE-01, HE-02 and WL-02.
Costs analysis of construction heavy equipment 11

Figure 5 Total cost

Total cost
R$250,00 R$226,55 R$218,67
R$195,01
R$200,00 R$175,55
R$157,47
R$144,42
R$150,00 R$119,83
Cost

R$100,00

R$50,00

R$0,00
HE-01 HE-02 WL-01 WL-02 MG-01 MG-02 MG-03
Equipment

After joining all costs analyzed the WL-02 remained with the lowest cost of all the equipment
analyzed, however the MG-02 showed the total cost higher, due to the fact that it has a fairly high
initial cost compared to too.

Figure 6 Costs comparison

Costs comparison
R$90,00

R$80,00

R$70,00

R$60,00

R$50,00

R$40,00

R$30,00

R$20,00

R$10,00
R$45,81 R$52,42 R$78,55
R$0,00
CADM CP CO

When the comparison between each of the costs is made graph shows that the operating cost
is the parameter with the greatest impact on the monthly cost of an apparatus. This result is due to
high fuel and maintenance costs, which weigh much time to analyze equipment costing.

5. CONCLUSION

The field analysis involves routine work situation. It is important to note that the conditions are
different for the equipment.
Costs analysis of construction heavy equipment 12

Practical assessment of the cost of maintenance, the company must have a specific cost
center for parts and services performed on equipment. These amounts will be included in the cost
of each device, thereby obtaining a real value of what was spent during the month of work.
To know the time cost just divide the monthly spending for hours worked in the reference
period. In this case the values to be used must be removed from the company's internal controls to
include in the cost
Hours worked must be controlled through the use of daily of the equipment, leaving the
operator to fill in accordance with the hours of operation.
The spent fuel and lubricants can be controlled through supply forms filled by the lubricator
responsible for the machine supply.
Administrative costs involve hourly wage for drivers and operators, social charges and
additional to labor, according to the company's payroll.
According to the analysis carried out it was concluded that:
 The cost of the operator's salary has little influence on the final result of the cost of
equipment. Increased investment in qualified professionals, even encumber a bit more
payroll can be interesting.
 The good operation of the equipment ensures a reduction in fuel consumption and
maintenance costs, as it keeps the maintained equipment, directly affecting two of the
biggest sources of cost when analyzing equipment.
 The development of preventive maintenance plans and scheduling stops for review will
have a positive effect over the years because it reduces large breaks that strongly impact
the final cost.
 The correct choice of equipment to be used in the activity in question is critical because a
super sizing may result in the acquisition of equipment that has a high cost of ownership,
and equipment with lower capacity and lower cost can perform the desired activity

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02/07/2016
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Costs analysis of construction heavy equipment 13

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