Cost per Hour for logging equipment
There are many variables to consider when determining the cost per hour for your forestry machine. Most of these variables fall under ownership costs, operating costs and machine availability and utilization categories.
THE LONGER THE PRODUCTIVE LIFE OF A MACHINE THE BETTER
– BY KEEPING YOUR MACHINE MAINTENANCE UP-TO-DATE AND FOLLOWING TIGERCAT RECOMMENDATIONS FOR YOUR MACHINE, YOU ARE ABLE TO SPREAD FIXED COSTS OVER MORE HOURS – REDUCING FIXED COST PER HOUR.
These are the costs associated with and derived from owning the machine. Ownership costs are also known as fixed costs. Factors used in determining fixed costs include:
- purchase price
- residual value
- finance period
- interest rate
- ownership period
- licensing fees
Machine availability and utilization
This is not a cost but must be known in order to break down all of the above costs per hour.
- scheduled shift length
- shifts per day
- work days per year
- machine availability
- allocated time per shift for meals, breaks, and routine maintenance (ie. greasing and fluid checks)
These are the costs directly incurred by running the machine and are also known as variable costs. Variable costs include:
- replacement parts
- maintenance labour
- fuel consumption
- operator labour costs
Now that you have determined your cost per hour, click the link below to read about calculating Production.