Results/Calculations/Plots/Discussions

The container business in a port Total Costs of Ownership (TCO) of a Reach-Stacker (RS):

Calculate the TCO of a Reach-Stacker using the scheme below. The scheme was created for a comparison of the procurement of a small forklift and compares two offers of different suppliers.

1. Identify the necessary from the text below, create Excel sheet and use it to calculate the operation hours, the TCO for both variants of the Reach-Stacker purchase options and the TCO per working hour, by using the given example.

• The requested working time for both devices is 5 years, 345 working days per year and 6 hours per working day.
• Supplier 1 (Variant 1) offers a price of $ 400,000.
• Supplier 2 (Variant 2) offers a comparable device for $ 440,000 but gives a sconto of 1%.
• Supplier 1 wants to have $ 3,000 for the delivery of the device and $ 800 for a training course.
• Supplier 2 have set the delivery for free and wants only $ 300 for an initial training.
• The device from variant 1 needs 10 liter diesel per working hour, the device of variant 2 just 90% of the fuel of variant 1.
• The price of the fuel is fixed over time on $ 1.25 per liter.
• The Maintenance costs for variant 2 are $ 13,000 and for variant 1 $ 15,000.
• For wear and tear parts the device of variant 1 needs $ 8,000, the device of variant 2 only 75% of this over the years.
• The guaranteed maximum down time for variant 2 is worth $ 6,000, but for variant 1 is it 50% higher.
• The technical department of your company says that you can get $ 150,000 for the variant 1 and $ 180,000 for variant 2 after the 5 years selling the used devices to other companies.
• All indirect costs are calculated with 20% of the relevant cost block.
• Consider positive and negative entries in the table: positive is all what you have to spend and negative all what you get from outside.

	Small Fork-lifter			Container-Reach-Stacker
Procurement	Variant 1	Variant 2		Variant 1	Variant 2
Price	$ 19,900	$ 22,000		$ 400,000	$ 440,000
Skonto	$ -	$ -660
Delivery	$ 500	$ -
Training	$ 200	$ 160
Indirect costs (20%)	$ 4,120	$ 4,300
	$ 24,720	$ 25,800
Operation (6,000 h)				Operation	h
Fuel	$ 18,000	$ 16,000
Maintenance	$ 4,000	$ 1,600
Wear and tear parts	$ 5,500	$ 3,000
Down time	$ 4,000	$ 4,000
Indirect costs (20%)	$ 6,300	$ 4,920
	$ 37,800	$ 29,520
Selling process
Selling price	$ - 5,500	$ - 4,000
Indirect costs (20%)	$ 1,100	$ 800
	$ -4,400	$ -3,200
TCO	$ 58,120	$ 52,120
TCO per hour	$ 9.69	$ 8.69

Observations and Data

Observe and analyze the list of costs and the calculations. Solve the numerical questions and make a summary and conclusion.

2. Mention other types of costs that can be included in the TOC calculations.

Conclusion and recommendations

2. From an economic point of view, I recommend the purchase of variant: ______________.