BYSAGAR

BY PREM KRISHNA PILVALKAR.

SASANE.
SYBSC 3

PRACTICAL NO 5.

Pricing of Contracts
The basis of payment for outsourced services may include the
following methods:-

• A management fee for consultancy services

• A unit rate agreement
• A fixed period cost
• A cost for the job plus a percentage of profits
• A cost for the job plus a fixed fee

Unit Rate Agreement:-

• Most contracts are agreed on this method

• The executive housekeeper provides details of the area to be covered
• Frequency of the job done & asks the service provider for the cost
• The contractor measures the area & calculates the cost

So man hour = Areas covered x Frequency of cleaning x time

Example :- Areas to be cleaned = 5

Time taken = 2 hrs
Frequency of cleaning = Twice a week (2 times)

Then Man Hours = 5 x 2 x 2(hrs)

= 20 hrs

The Contract will add:-

Wages of workers & supervisors

Cost of equipment, agent & supplies
Cost of Overheads & profits
And will quote the total price
Sample calculation foe costing of contract service using man hands

We assume that it will be 300hrs/years

Worker’s = Rs X per-year
Supervisor = Rs Y per-year
Small equipment’s supplies = Rs Z per-year
Large equipment’s & supplies
5 vacuum cleaners = Rs A
1 floor polisher = Rs B
1 floor scrubber = Rs C
2 carpet shampoo machines = Rs D

Total cost of equipment would be

Rs A +Rs B + Rs C + Rs D = Rs M
Since they are large equipment we consider the value over the period of 5year
So
Calculating the cost of large equipment per year would be
-Rs M/S
Cost of cleaning agents =Rs N per year can be calculated as
Rs 300 ( X+Y+Z+N=M/5)

• Sample calculation for costing of contract services using

area to be cleaned.

Total area to be cleaned – 60ft x 50ft = 300 sq.ft

Rs. X per sq.ft
Area to be cleaned (frequency) – Twice in a month
Therefore, Rs. 3000 x 2(x) x 12 per year
Supervisors :- Rs. Y & small equipment – Rs. Z per year
Large Equipment:-
5 Vacuum Cleaners – Rs. A
1 Floor Polishers - Rs. B
1 Floor Scrubber - Rs. C
2 Carpet Shampoo Machines – Rs. D
TOTAL COST OF EQUIPMENT WOULD BE

Rs A +Rs B + Rs C + Rs D = Rs M
Since they are large equipment we consider the value over the period of 5year
Calculating the cost of large equipment per year would be
-Rs M/S
So , the total cleaning cost per year
Rs 3000 x 12x2(x) +Y+Z+N+M/5