Lecture 2

Labor and Equipment

 Production Rates

The number of units of work produced by a unit of equipment or a

person in a specific unit of time. The unit of time is usually 1 hr or 1
day. Rates are subject to variation, depending on difficulty of work,
job and management condition and condition of equipment.
Production rates for labor may also specify time in man-hours or
man-days. Labor rates should be realistic allowing for the fact that a
person usually will not work 60 min/hr.
Equipment rate may be determined during an interval when
production is progressing at a maximum possible speed. Usually at
45 min/hr then multiply by an operating factor of say 0.75 to get the
average production rate.
Sample Labor Rates
Prod. Rate
Earthworks
Excavation (Common Earth) cu.m. 1.00 m3/MD 0.1250 m3/Hr
Backfilling cu.m. 2.50 m3/MD 0.3125 m3/Hr
Reinforcement
Fabrication(cut & bend) kg. 68.00 kg/MD 8.5000 kg/Hr
Placing Footing Reinf. kg. 95.74 kg/MD 11.9575 kg/Hr
Placing Columns Reinf. kg. 85.00 kg/MD 10.6250 kg/Hr
Formworks
Fabrication sq.m. 6.26 m2/MD 0.7825 m2/Hr
Columns Forms installation sq.m. 2.86 m2/MD 0.3575 m2/Hr
Columns form removal sq.m. 7.96 m2/MD 0.9950 m2/Hr

Concrete Placement
Footing cu.m. 3.32 m3/MD 0.4150 m2/Hr
Columns cu.m. 1.02 m3/MD 0.1275 m2/MD
 Masonry Works

a)CHB Laying Production rate

1)chb 4" sq.m 5.10 m2/MD 0.6375 m2/Hr
2) CHB 6" sq.m 4.25 m2/MD 0.5313 m2/Hr
3) CHB 8" sq.m 3.40 m2/MD 0.4250 m2/Hr
b) Brick Works (1.0 x 2.0m) sq.m 13.60 m2/MD 1.7000 m2/Hr
c) Red Bricks (1/4" x 2" x 8") sq.m 1.36 m2/MD 0.1700 m2/Hr
d) Laying of Adobe sq.m 5.98 m2/MD 0.7475 m2/Hr
• General
Equipment Costs

• Most projects involve the use of construction equipment.

• When equipment is purchased, it is necessary to determine the
cost of owning and operating each unit, which will include all of
several of the following items:
1. Depreciation
2. Maintenance and Repairs
3. Investment (interest, taxes, insurance, and storage)
4. Fuel and lubrication or electricity
Depreciation Costs

Depreciation is the loss in value of equipment resulting from use and age. The owner
of equipment must recover the original cost of the equipment during its useful life or
sustain an equipment loss on those projects where equipment is used.

The following methods of determining the cost depreciation are most commonly
used:
1. Straight-line method
2. Declining-balance method
3. Sum-of-the-year’s digit method
Straight Line Depreciation
• In this method, it is assumed that a unit of equipment will decrease in value
from its original total cost at a uniform rate. The depreciation rate may be
expressed as a cost per unit of time, or cost per unit of work produced.

Example:
Cost new P 12,000.00
Salvage value P 2,000.00
Useful Life 2,000 h/year for 5 years
Total depreciation P12,000.00-P2,000.00 = P 10,000.00
Annual Cost of depreciation P10,000/5 = P 2,000.00
Hourly Cost of depreciation P 2,000.00/2000 = P 1.00/hr
Declining-Balance method

• In this method the estimated life of the equipment in years will

give the average percentage of depreciation per year. This
percentage is doubled for the 200% percent declining-balance
method.
End of Year % of Depreciation Depreciation Book Value
for this year
0 0 P 0.00 P 10,000.00
1 40 4,000.00 P 6,000.00
2 40 2,400.00 3,600.00
3 40 1,440.00 2,160.00
4 40 864.00 1,296.00
5 40 518.40 777.6
5 9,222.00 1,000.00
Sum of the Year’s Digits Method
• In this method, all the digits representing each year of the
estimated life of the equipment are totalled. For an estimated life
of 5 years, the sum of the digits will be 1+2+3+4+5=15. Deduct the
estimated salvage value from the total cost of the equipment.
During the first year, the cost of depreciation will be 5/15 of the
cost less salvage value. During the second year, the cost of
depreciation will be 4/15 of the cost less salvage value and so on
until the fifth year.
End of year Depreciation Total Depreciation this Book value
ratio Depreciation year

0 0 P 9,000.00 0.00 P 10,000.00

1 5/15 9,000.00 3,000.00 7,000.00

2 4/15 9,000.00 2,400.00 4,600.00

3 3/15 9,000.00 1,800.00 2,800.00

4 2/15 9,000.00 1,200.00 1,600.00

5 1/15 9,000.00 600.00 1,000.00

Fuel and Lubricants

Fuel Consumption:
• Gasoline engine ≈ 0.273 liters/hp-hr
• Diesel engine ≈ 0.182 liters/hp-hr
Lubricants:

Where: Q = quantity consumed l/h

hp = rated horsepower of engine
c = capacity of crankcase, liter
t = hours between oil changes (100 h to 200 h)
Other lubricants: 50% of main lubricants
Cost of Rubber Tires
• Construction equipment use rubber tires, whose life usually will
not be the same as that for the equipment on which they are
used. The cost of depreciation and repairs for tires should be
estimated separately from the equipment.
• A set of tires may have an estimated life of 5,000 h with repairs
during the life of tires costing 15% of the initial cost of the tires.
Average Value of Equipment with no Salvage value after useful
life
Estimated Average value as percentage of
Life, yr. original cost
2 75.00
3 66.67
4 62.50
5 60.00
6 58.33
7 57.14
8 56.25
9 55.55
10 55.00
11 54.54
12 54.17
Illustrative Example 2: Unit Cost Analysis
Equipment: One-Bag Mixer
Purchase Cost: P 26,000.00
Useful life: 5 years
Salvage value: P 5,000.00
5.5 Hp Diesel Engine
Req.: Determine depreciation using straight line method
and cost of operating the equipment.
Solution:
Total depreciation = P26,000.00-P5,000.00=P 21,000.00
Annual Cost of Depreciation= P 21,000.00/5= P 4,200.00
Hourly Cost of Depreciation = P 4,200.00/2000 hours= P2.10/hour
Fuel Consumption
0.182 liter/hp-hr * 5.5 hp * 2,000 hr/yr = 2,002 liters/year*
year/2000 hr = 1 liter/hr
Lubricants

Rubber tires (2) P 4,000.00 = P0.80/hr + P.12/hr = P0.92 /hr

• P 2.10/hr * 8 =P 16.80
• 1 liter/hr*8*68= P544.00
• 0.02 l *8=0.16 l * 300 = P 48
• P0.92 /hr * 8 = P 7.36
• P 616.16
Unit Cost Analysis: Submersible Pump

• ½ HP Electric
• P 5,000.00
• P 1,000.00
• 5 years
• Depreciation P0.4/hr
• 373 watts =.373 kw
• 8 hrs
• P15/kw-h
• P 44.76 /hr