Equipment Type

Hours Drive O&O Costs

Hourly ownership costs vary widely with small changes in machine utilization, so a realistic estimate of hours of use is crucial to calculating machine rates.

November 01, 2002

Hourly ownership costs vary widely with small changes in machine utilization, so a realistic estimate of hours of use is crucial to calculating machine rates. If utilization falls short of the estimate, your machine rate will be too low to recover all machine costs. For example, if a $135,000 dozer falls just 5 percent short of its projected lifetime hours—averaging 1,045 hours per year instead of 1,100—hourly costs rise more than $1. In contrast, you'd have to reduce repair costs 20 percent and add 140 productive hours in the machine's 7-year life to reduce its hourly costs by $1.

Utilization*
Hours per year Total hours O&O cost per hour
*$135,000 bulldozer
1,045 7,315 $36.29
1,100 7,700 $35.25
1,155 8,085 $34.31


More like this

Comments on: "Hours Drive O&O Costs"

Subscribe Today

Enter your email address here to be automatically subscribed to our daily newsletter!

CE-Management
Overlay Init