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Once you have determined how much a machine or a harvesting system is producing per hour, it is time to assign a cost per hour to that given machine or system. Good record keeping will make this process easier.

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.

 


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Ownership costs

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
  • insurance

Illustration of a clock with an arrow pointing to the number 24. Representing "24/7" or around the clock.

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)

 

 

 


Illustrated icon of a fuel nozzle dripping, a dollar sign is below it to represent fuel costs

Operating costs

These are the costs directly incurred by running the machine and are also known as variable costs. Variable costs include:

 

  • filters
  • fluids
  • 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.