A contract requires the excavation, load and haul of 1 500 000 m (measured in the bank i.e. before loosening during excavation and loading; the material swells by 30% during excavation and loading). The length of haul = 5,6km; slope = flat; condition = good. The contract must be completed within a year. The project will operate on 3 shifts a day of 7 hours each. Mechanics, spares and workshops are on site. The utilisation of any piece of equipment on this project may be assumed to be 3 500 hours per year. The main equipment for the whole project consists of diesel powered loaders and trucks with the following characteristics: Loader Power of engine 161 kW Purchase price (excluding VAT; VAT = 14%) R1 300 000 Size of Bucket Operating factor (Engine factor x time factor) 0,5 Set of tyres (life 2 years) R60 000 Truck plus body (Mercedes 26/29 plus Meiller Body) Volume of material per load 10 m (16) Power of engine 233.40 kW Purchase price (excluding VAT = 14%) R1200 000 Operating factor 0,52 Average speed unload 60 kph load 3 m 40 kph Set of tyres (life 2 years) R70 000 Other assumptions: Interest rate 15% Insurance & taxes 5% Economic life of equipment 5 years Fuel Diesel usage: 0,203 litres per kW hour (maximum) Cost of Diesel: R15.50 per litre Lubrication (oil): Assume 10% of fuel cost Operator/Driver + Spanner man: R80 per hour. Elevation above sea level: 1 560 m The average value of a piece of equipment having an estimated life of n years is p(n+1) p* 2n where p* = average value and p = purchase price (1) What is the annual running cost of operating one complete truck plus body? (ii) Determine the hourly cost of owning and operating one 233.4 kW complete truck plus body (iii) Plot Hourly Cost against Hours of Utilisation per year. What is the significance of the y-intercept (with respect to the Cost axis)? A contract requires the excavation, load and haul of 1 500 000 m (measured in the bank i.e. before loosening during excavation and loading; the material swells by 30% during excavation and loading). The length of haul = 5,6km; slope = flat; condition = good. The contract must be completed within a year. The project will operate on 3 shifts a day of 7 hours each. Mechanics, spares and workshops are on site. The utilisation of any piece of equipment on this project may be assumed to be 3 500 hours per year. The main equipment for the whole project consists of diesel powered loaders and trucks with the following characteristics: Loader Power of engine 161 kW Purchase price (excluding VAT; VAT = 14%) R1 300 000 Size of Bucket Operating factor (Engine factor x time factor) 0,5 Set of tyres (life 2 years) R60 000 Truck plus body (Mercedes 26/29 plus Meiller Body) Volume of material per load 10 m (16) Power of engine 233.40 kW Purchase price (excluding VAT = 14%) R1200 000 Operating factor 0,52 Average speed unload 60 kph load 3 m 40 kph Set of tyres (life 2 years) R70 000 Other assumptions: Interest rate 15% Insurance & taxes 5% Economic life of equipment 5 years Fuel Diesel usage: 0,203 litres per kW hour (maximum) Cost of Diesel: R15.50 per litre Lubrication (oil): Assume 10% of fuel cost Operator/Driver + Spanner man: R80 per hour. Elevation above sea level: 1 560 m The average value of a piece of equipment having an estimated life of n years is p(n+1) p* 2n where p* = average value and p = purchase price (1) What is the annual running cost of operating one complete truck plus body? (ii) Determine the hourly cost of owning and operating one 233.4 kW complete truck plus body (iii) Plot Hourly Cost against Hours of Utilisation per year. What is the significance of the y-intercept (with respect to the Cost axis)
