Mitchell, Z; Hildreth, J and Vorster, M (2011) Using the cumulative cost model to forecast equipment repair costs: Two different methodologies. Journal of Construction Engineering and Management, 137, pp. 817-822. ISSN 0733-9364
Abstract
Professionals in the construction industry must be able to accurately forecast costs. Doing so not only helps assure reasonable profits for companies, but it can also help ensure that projects are delivered within budget for clients. Forecasting of equipment repair costs is one element of the larger problem of predicting overall costs. The cumulative cost model can provide construction engineers with a valuable tool for better understanding the nature of repair costs as they relate to production fleets. Data that are being collected (or that could be collected) can assist in the determination of the rate of accumulation of repair costs for a machine for a given period of use or the estimation of fleet repair budgets for a job or period. There are two different methodologies for constructing the repair cost portion of the cumulative cost model: life-to-date (LTD) repair costs and the period-cost-based (PCB) model. This paper will provide the steps and background for each of these two methodologies and compare them using a practical example.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | construction equipment; equipment economics; equipment management; heavy equipment |
| Index terms: | repair, methodology, cost model, equipment management, profit, construction industry, engineer, estimation, construction equipment, forecasting |
| Subjects: | industry analysis, construction equipment, maintenance engineering, research methods, financial and cost management, economic analysis, prediction and forecasting, operational management, profession |
| Topics: | Roles and Professions, Plant and Equipment, Business Strategy, Cost Management, Research Practice |
| Descriptive scope: | 4 PCTA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here