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National Institute of Construction Management and Research, Pune

SCHOOL OF DISTANCE EDUCATION

ASSIGNMENT ON MATERIAL & EQUIPMENT MANAGEMENT

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ASSIGNMENT

COURSE NO : PGCM 13

COURSE TITLE : MATERIALS & EQUIPMENT MANAGEMENT

ASSIGNMENT NO : 3

DATE OF DISPATCH : 25/11/2014

LAST OF ASSIGNMENT : 05/12/2014AT CODE OFFICE

SUBMITTED BY:

K UDHAYA SANKER

REG NO: 214-08-11-50127-2161




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ASSIGNMENT

1. Your company has been awarded a contract of developing and construction a new

International air port 30 KM from a city. You have been appointed as Planning Engineer.

Project is to be implemented in phases. In phase I, one strip of landing 100 m width is to be

constructed in 100 days.

The scope of work is as follows:

(a) Cutting and dozing of 1, 00,000 cum of earth. Average height is 0.75 m.

(b) Transportation of 20,000 cum of surplus earth from site to dumping ground 3 KM

away from site. Filling of 80,000cum of earth.

(c) Bringing of 20,000 cum of sand from 20 KM (including of spreading and

leveling).

(d) Procurement of 1,50,000 liters of bitumen. Duration of work 30 days from the

60th day of starting work. Lead time for the procurement of bitumen is 45 days.

Storage facility of 50,000 litres at site.

2. Estimate total cost of work and your plan of:

(a) Equipment planning – procurement and development.

(b) Ordering and replenishing of Bitumen.




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INTRODUCTION of Construction equipments

Construction equipments are one of the very important resources of modern-day

construction, especially in infrastructure projects. Such projects utilize equipments for most

of the works including earthmoving operations, aggregate production, concrete production

and its placement, and so on. In fact, one cannot think of any major construction activity

without the involvement of construction equipment. There are different types of construction

equipments suitable for different activities in a construction project. The choice of

construction equipment defines the construction method, which in a way leads to the

determination of time and cost for the project. In order to select the right equipment to

perform a specific task at the least cost, it is essential to know the features of construction

equipment including its rate of production and the associated cost to operate the equipment.

For a contractor, the decision to employ a particular type of equipment is influenced by the

contract he enters with the owners, the site condition and the location of the project site.

Specifications indicating the capabilities and the different features of construction equipments

are provided by manufacturers.

The factors to be considered for the selection of some important construction

equipment have been discussed. An effort has also been made in here to cover topics such as

financial issues involved in purchase of equipment, issues involved in choosing an

equipment, accounting for assets generated, and considerations in computation of

depreciation of equipment. Certain aspects of implications of the above factors on tax

calculation are also covered.

FACTORS BEHIND THE SELECTION OF CONSTRUCTION

EQUIPMENTS




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The selection of the appropriate construction equipment is an important part of job

planning. The contractor has many different options to choose from, which makes the

selection even more complicated. A planner has to choose the alternative that provides the

best value from a cost and schedule perspective.

Selection of equipment for construction projects generally involves two classes of

factors or considerations-hard factors and soft factors. Examples of hard factors include

technical specifications of the equipment, physical dimensions of the site and constructed

facility, and cost calculations. As can be noticed, hard factors are tangible in nature. On the

other hand, soft factors are mostly intangible, qualitative and informal in nature. Some

examples of soft factors are safety considerations, company policies regarding purchase/

rental, market fluctuations and environmental constraints. The soft factors influence decision-

making to a large extent.

In the following paragraphs, we discuss some of the factors that govern the

equipment-selection decision. It may be difficult to come up with a set of decision variables

that are applicable for the selection of all types of equipments used in construction, and

hence, only a few common decision variables are discussed.

Economic Considerations

The economic considerations such as owning costs, operating labour costs and

operating fuel costs of equipment are most important in selection of equipment. Besides, the

resale value, the replacement costs of existing equipment, and the salvage value associated

with the equipment are also important.

Company-specific

The selection of Equipment by a company may be governed by its policy on ‘owning'

or ‘renting': While emphasis on 'owning' may result in purchase of equipment keeping in

mind the future requirement of projects. The emphasis on 'renting' may lead to putting too

much focus on short-term benefits. This may explain the situation of a construction company

opting for two 30 m3/h batching plant owned by the company and currently idle, instead of

http://www.machinerychina.org/building-construction/concrete-batching-plant.html




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the required one 45 m3/h batching plant that it can get on rent. It is clear that the company

wants to deal with the 30 m3/h batching plant keeping future projects in mind, even though

going for the 45 m3/h batching plant option at present may have been economical.

Further, if the company project forecast says that there will be considerable number of

projects involving a particular type of construction equipment, say X, for the next couple of

years, then the decision would be to buy only this type of equipment. Construction Company

specializing in a particular type of construction, such as tunneling, will have a tendency to

procure only those equipments that are used in tunnel construction. The equipment-selection

decision also depends on the amount of outsourcing the company does to execute its projects.

A company opting to subcontract a majority of their project work will tend to keep low

equipment asset.

Site-specific

Site conditions-both ground conditions as well as climatic conditions may affect the

equipment selection decision. For example, the soil and profile of a site may dictate whether

to go for crawler-mounted equipment or wheel-mounted equipment. If there is a power line at

or in the vicinity of site, one may go for a fixed-base kind of equipment rather than a mobile

kind of equipment. Similarly, climatic conditions such as the presence of strong winds,

visibility level and noise level may affect equipment-selection decision. Further, the access

leading to the site may also affect the decision. Heavy traffic congestion near a site may lead

to a decision to produce the concrete at site and, hence, selecting a concrete batching plant

rather than relying on ready mix concrete. Similarly, if there is only a narrow road leading to

the site, it may have a bearing on type of transportation equipment selected for the site.

Equipment-specific

Construction equipments conic with high price tags. While it may be tempting to go

for the equipment with low initial price, it is preferable to opt for standard equipments. Such

equipments are manufactured in large numbers by the manufacturers, and their spare parts are








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easily available, which would ensure minimum downtime. Besides, they can also fetch good

salvage money at the time of their disposal.

It is a general tendency to go for such equipments that can bring in 'uniformity' in the

type of equipments that are already available with the company. For example, a company

would like to go for a uniform type of engines for different machines such as excavators,

dumpers and tractors.

The size of equipment selected is also an important consideration. Although the unit

production cost may be cheaper for equipments of large size, it is also true that large

equipments require correspondingly larger sizes of matching equipments. Thus, downtime in

one primary unit may lead to downtime in dependent equipments also trade-off between unit

production costs versus size must be obtained and as far as possible, equipments of similar

sizes should be selected for the project.

Besides the above factors, the versatility (whether it can perform more than one

function) of equipment, the adaptability for future use, the past experience with the

equipment, and the interaction with other equipments are also to he noted.

Client and Project-specific

The owner/client in a certain project may have certain preferences that are not in line

with the construction company's preferred policies as far as equipment procurement is

concerned. The schedule, quality and safety requirements demanded of a particular project

may in some cases force the company to yield to the demands of the client.

Manufacturer-specific

A construction company may prefer to buy equipment from the same manufacturer

again and again and that too from a specific dealer. This may be to bring in uniformity in the

equipment fleet possessed by the company or because the company is familiar with the

working style of the manufacturer and the dealer. Long association may not only result in




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cheaper price, but it also ensures prompt services by the manufacturer with regard to the

company.

Labour Consideration

Shortage of manpower in some situations may lead to a decision in favour of

procuring equipment that is highly automated. Further, the selection of equipment may be

governed by the availability or non-availability of trained manpower. The company may not

be inclined to select some sophisticated equipment if it finds that there is limited availability

of manpower to operate the same.

Assumptions

(a) Type of equipment:

Excavator: for cutting/ excavation

Dozer for dozing

Grader: for spreading of material

Dumper: For shifting/ Hauling of material

Roller and water tanker: for compaction

(b) Working Hours : 10 hours per day and max of 60 per week.

(c) Maintenance : 10 hours per week per plant (one day per week)

(d) Induction period : Three working days (for dismantling, transport, reassembly,

testing) for a lead of 100 km.

(e) Break down period considered : Four days per equipment in a month.

(f) Adequate spares and sub assemblies are available with trained maintenance staff.

(g) Key plan of the area has been prepared and the plant operators are familiar with the task at

hand.

(h) Work is being executed as per the Key plan.




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(i) Plant operators are experienced are capable of achieving the planned output.

(j) No disruptions have been considered for reasons of inclement weather / other factors.

(k) Plant/equipment as planned will be available.

(l) Will take equipments for rent. Then rent amount per hour includes the diesel consumption

and maintenance cost

COST ANALYSIS

1. Excavation of 100000 cum soil.

Consider 3 no. of excavators 0.9 cum bucket capacity @ 60 cum per Hour

Output 3 excavators (10 Hrs working) = 1800 cum/day

Total duration required to excavate 100000 cum soil = 56 days

Assume cost of operation of excavator @ Rs 1850 per Hour

Total cost for excavation of 100000 cum soil = Rs 31.08 L

2. Dozing of excavated material

Consider 4 nos. of Dozer, 80HP @ 40 cum per Hour

Output 4 Dozers (10 Hrs working) = 1600 cum/ day

Total duration required to excavate 100000 cum soil = 63 working days

Assume cost of operation of Dozer @ Rs 1200 per Hour

Total cost for dozing 100000 cum soil = Rs 30.24 L

3. Shifting of 20000 cum soil 3Kms away

Consider 8 no. of dumpers to execute this work

Capacity = 10 cum/ Trip

Cycle time for a single trip




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Loading of material = 15 min.

Forward journey with loaded material = 10 min

Unloading of material = 5 min.

Return journey = 10 min.

Total duration required for single trip = 40 min

Total number of trip in a day (10 Hr working) = 15 nos.

Total Output of 8 dumpers per day = 1200 cum

Total duration required to shift 20000 cum = 17 working days

Assume cost of operation of transportation of material @ Rs 650 per hour

Total cost of hauling of 20000 cum soil for 3 Km lead = 80 x 17 x 650

= Rs 8.84 L

4. Shifting of 20000 cum sand from 20Km away

Consider 8 no. of dumpers to execute this work

Capacity = 10 cum

Cycle time for a single trip

Loading of material = 15 min.

Forward journey with loaded material = 30 min

Unloading of material = 5 min.

Return journey = 30 min.




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Total duration required for single trip = 90 min

Total number of trip in a day (10 Hr working) = 7 nos.

Total Output of 8 dumpers per day = 560 cum

Total duration required to shift 20000 cum = 36 working days

Assume cost of operation of transportation of material @ Rs 650 per hour

Total cost of hauling of 20000 cum sand for 20 Km lead = 80 x 36 x 650

= Rs 18.72 L

5. Spreading of 80000cum soil and 20000cum Sand

Consider 3 nos. Motor Grader110 HP, 80 cum per Hour

Output of 3 graders (10 Hrs working) = 2400 cum per day

Total duration required = 42 working days

Assume cost of operation of grader @ Rs 1100 per Hour

Total cost for spreading 100000 cum material = Rs 13.86 L

6. Compaction

Consider 2 nos. Vibratory road roller 8-10 tonne capacity, 100 cum per Hour and

2 nos. water tanker 6 KL capacity

Output of 2 rollers (10 Hrs working) = 2000 cum per day

Total duration required = 50 working days

Assume cost of operation of roller @ Rs 1000 per Hour and operational cost for water

tanker @ Rs. 1600 per day

Total cost for compacting 100000 cum material (Roller + Water tanker)




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= Rs 10.80 L

SUMMARY OF EQUIPMENTS REQUIRED AND COST ESTIMATE

Sl. No.

Activity Equipment planned

Unit cost of Operation

Total estimated cost

1 Excavation of 100000 cum soil

Excavator 0.90 cum bucket- 3 nos.

Rs. 1850 per Hour

Rs. 31.08 L

2 Dozing of 100000 cum soil Dozer, 80HP- 4 nos.

Rs. 1200 per Hour

Rs. 30.24 L

3 Shifting of 20000 cum

surplus soil 3Kms away

Dumper- 8 nos. Rs 650 per hour Rs. 8.84 L

4 Shifting of 20000 cum sand

from 20Kms distance

Dumper- 8 nos. Rs 650 per hour Rs. 18.72 L

5 Spreading of 80000 cum soil and 20000 cum sand

Motor Grader, 110 HP- 3 nos.

Rs. 1100 per Hour

Rs. 13.86 L

6 Compaction of 100000 cum material

a)Vibratory roller, 8-10 T capacity-2 nos.b) Water tanker- 2 nos., 6 KL cap.

a) Rs. 1000 per Hour

b) Rs 1600 per day

Rs. 10.80 L

Total estimated cost

Rs. 113.54 L

PROCUREMENT OF BITUMEN

a. Lead time

As the name implies, it is the period elapses between the point of time when the need

for material is contemplated & the point of time the material actually available on the

site of construction for use.

It comprises time required for:-




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1) User’s intimation to the materials manage department regarding the time &

quantity of material required.

2) Materials management to decide that the materials purchased.

3) Selecting the source, fixing the price & ultimately placing the order.

4) To deliver the material.

5) Transportation & receiving the material including inspection & testing of material

if necessary.

b. Safety level

From the user’s point of view, the problem arises due to following factors-

1) The lead time in purchase is uncertain & if it delayed it will result in stoppage of

work.

2) There may be unexpected shortage due to scarcity (or total non-availability) of

material or some unexpected difficulties in transportation.

3) The continuously rising prices & small quantities purchased frequently may make

the Materials costlier.

So, if the user will overcome all these problems then & then only he will be in

safety level.

In this case of bitumen, from the time the order is placed, it takes 45 days for the material to

reach the site. Hence, the order for the material is to be placed a minimum of 45 days before

the requirement for use actually comes up.




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We will consider the case in detail:

i. Bitumen required from 60th day after work commencement.

ii. Lead time 45 days.

iii. Total Requirement 1, 50,000 liters.

iv. Storage capacity 50,000 liters.

v. No of orders to be placed – minimum three each of 50,000 liters bitumen.

vi. First order to be placed on – 15th day of work.

vii. Material reaches site on 60th day of work.

viii. Average rate of consumption of bitumen 5000 ltrs per day. Second order to be placed

on 25th day of work.

ix. Order materializes on 70th day of work.

x. Similarly third order to be placed on 35th day of work and order materialises on 80th

day of work.

xi. Work is completed on 90th day after commencement.

Day from

beginning

Opening

stock

Order

placed

Order Total Consumed Closing

stock

15 0 50000 - - - -




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25 0 50000 - - - -

35 0 50000 - - - -

60 0 - 50000 50000 5000 45000

69 5000 - - 5000 5000 -

70 0 - 50000 50000 5000 45000

79 5000 - - 5000 5000 -

80 0 - 50000 50000 5000 45000

89 5000 - - 5000 5000 -

Work complete

CONCLUSION

Thus the total cost of the project is calculated as per today’s schedule of rates. It may vary

depends on time of execution. Planning and selection of equipments for the above project is

done exactly to achieve maximum results.

BIBLOGRAPHY/ READINGS

1. Dr. B. S. Patil, construction equipments & planning.

2. Lesson books, NICMAR, NCP 24 & NCP 25.

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