Operating cost:-

Operating cost is incurred only when the equipment is operated. The operating cost of the equipment is influenced by various parameters namely number of operating hours, location of job site, operating conditions, category of equipment etc. The operating cost consists of the following;

a) Repair and maintenance cost, b) Fuel cost, c) Cost of lubricating oil, filter and grease, d) Tire cost e) Equipment operator wages, f) Cost of replacing high-wear items and g) Cost of mobilization, demobilization and assembly.

a) Repair and maintenance cost

Repair and maintenance cost is incurred as the construction equipment is subjected to wear and tear due to the operations it performs. The repair and maintenance cost includes the cost of replacement parts, labor charges and the cost of setting up and operating facilities to carry out major repair and maintenance operations. The repair and maintenance cost varies from one year to another over the service life of the equipment, however it increases with age of the equipment. This cost contributes a substantial portion of the operating cost. The increase in service life and decrease in repair and maintenance cost of construction equipment can be achieved by carrying out timely recommended maintenance and repair operations. The minor repairs can be carried out at the job site where the equipment is operating, however the major repairs can be carried out in the facilities set up by the equipment owner or in the workshop of authorized dealers for the equipment. The annual repair and maintenance cost can be calculated as a percentage of the annual depreciation cost of the equipment. Past information available from company records or from other relevant sources for similar equipment under similar working conditions can be used for estimating the repair and maintenance cost. If this data is not available, equipment manufacturer's guidelines can be used for calculating this cost. The hourly repair and maintenance cost can be calculated by dividing the annual cost by the number of operating hours per year.

b) Fuel cost

The construction equipments are generally powered by internal combustion engines which use either gasoline (petrol) or diesel as the fuel. The fuel consumption depends on the rated flywheel horsepower (fwhp) of the engine and the nature of working conditions. The flywheel horsepower represents the power available for operating a piece of equipment. A gasoline engine consumes about 0.06 gal (gallon) of fuel per flywheel horsepower hour whereas a diesel engine consumes about 0.04 gal of fuel per flywheel horsepower hour when operating under standard conditions. Historical data about the quantity of fuel consumed by similar equipment under similar working conditions can be used to estimate the hourly fuel consumption by the equipment. If these records are not available, equipment manufacturer's fuel consumption data can be used to estimate the fuel cost. The hourly fuel cost can be calculated by multiplying the hourly fuel consumption by its unit price.