Top 5 Factors that Impact Equipment Cost & Value

The precise determination of the ownership of equipment as well as the cost of operations is considered to be one of the most important and difficult jobs that the equipment manager needs to perform. There are multiple factors which go into cost of equipment ranging from initial cost of purchase and sales taxes for overhauling the hours and costs.

1. Purchase cost- it has a huge impact on the operating cost and the ownership cost. Even a small difference in cost causes a huge change in the cost of equipment. When the internal rate is prominently higher than the cost of equipment benchmark, original purchasing price needs to be the first point that the business leaders need to look at. It could be determined that the business should buy from different dealers and look into cheap manufacturer.
2. Annual usage hours- this has the biggest impact on operating cost and the ownership. When an equipment is not used properly, the cost also increases for recovering the fixed cost. When an equipment gets overused the cost decreases. Lower the cost of equipment, might sound to be good theoretically, but when the cost happens because of high usage, the owner of the equipment usually is lessening the life of the machinery.
3. Maintenance of the field- it directly impacts the operating cost of the machine’s it is expected, more money as well as time is spent on the maintenance of field, higher will be the cost of operations. Increased costs of maintenance and repairing hours along with the wages of the mechanic might have severe impact on the operational costs. However the records of maintaining the field can do a lot for the company than what causes the costs for fluctuating. Just like the annual usage hours, the records of maintenance might give the business leaders an insight into the way operators and the mechanics treat as well as use the machine. When the maintenance of the field causes hourly operation cost for exceeding the cost of hourly ownership for piece of equipment, it signals that it is now time for replacing the machinery.
4. Local wages of mechanics- it also impacts the cost of operations. An increased cost of operations because of the wages of the mechanic might raise the red flag. The wages of the mechanic are definitely a factor for the contractor to keep a check.

By Vendaxo