Calculation for shovel and trucks cost using Cater pillar Method

a) CAT 773e rigid dump truck

OFF-HIGHWAY TRUCK 39 940 ton

Estimated annual use in hrs = 5 360hrs

Total expected use in use in hrs = 40 000h

Useful life = 40 000/5360 =7.46 yrs
Tires front = $8 000
Tires drive = $ 16 000
Fuel cost = $1.25/litre
Equipment horse power : 672hp
Working conditions :average
Repair factor : 0.07
Factor = factor taken from caterpillar handbook 49

Calculation of Depreciation Value

1. Delivered price (including freight, )

List price = $850 000.00

Freight: 548 cwt ($3.08/cwt) = $1687.84

Subtotal =$851 687.84

2. Less tire replacement costs

Front: $4000.00
Drive: $16 000.00

Subtotal = $20 000.00

3. Delivered price less tires = $831 687.84

4. Net value for depreciation = $831 687.84

Ownership Cost

5.Depriciation = [net value]/[depreciation period in hours]

= $831 687.84 /40,000.00

= $20.72
6. Interest, insurance, taxes: interest = 6.75%; insurance = 3%; taxes = 2%

( 7.46 ±1 )∗( 831687.84 )∗(0.12)

2 ( 7.46 )
Interest=
5360

= $10.56/h

( 7.46 ±1 )∗( 831687.84 )∗(0.03)

2 ( 7.46 )
Insurance=
5360

=$2.64/h

( 7.46 ±1 )∗( 831687.84 )∗(0.02)

2 ( 7.46 )
Taxes=
5360

=$1.75/h

7) Total hourly ownership cost = $35.67/h

 Operating Cost

8.Fuel consumption per hour = 34L

Fuel cost hourly = $42.50/h

9.Filter-Oil-Grease (FOG) cost = FOG factor (fuel cost) (labour

adjustment factor)
= 0.533 x5.68 x 0.88

From cat dealer FOG = $2.67/h

10. Tires
(Replacement cost)/ (Estimated line in hrs) = $24 000/ 2000
=$12/h
11.Repairs: (Factor * (delivered price less tires))/ 5360
= 0.07 *(831 687.84)/5360
=$10.86/h
12. Total hourly operating cost = $ 68.03
13. Operator hourly wage = $5.68
14. Total Ownership and operating cost = $109.38/h