Equipment Management through Operational Failure Costs
Publication: Journal of Construction Engineering and Management
Volume 120, Issue 3
Abstract
This paper defines operational failure costs (OFCs), presents a method for their development, and examines their usefulness as a means of equipment management. It considers variables related to the projected use of the equipment in the context of the production team and the construction site as a whole as well as the importance of each piece of equipment. In addition, it takes into account, the point of view of the company in light of management objectives and the number of projects it undertakes concurrently. Furthermore, this paper examines the magnitude and importance of costs caused by equipment failure; demonstrates the importance of equipment assignment; examines the relative equipment importance within a project; avoids the concept of unit cost that is considered a weakness in linear programming approaches; examines the use of OFC as a decision‐support tool for equipment purchase, retirement, replacement, rent, and lease; and evaluates detailed operations plans as well as contingency plans. Finally, it presents an application of the method in a “typical” earthmoving project using SLAM II as the simulation software.
Get full access to this article
View all available purchase options and get full access to this article.
References
1.
Banks, J., and Carson, J. S. (1984). Discrete‐event system simulation. Prentice‐Hall, Inc., Englewood Cliffs, N.J.
2.
Caterpillar performance handbook. (1990). 21st Ed., Caterpillar Tractor Co., Peoria, Ill., Oct.
3.
Cox, E. A. (1971). “Equipment economics.” Handbook of heavy construction, 2nd Ed., J. A. Havers, and F. W. Stubbs Jr., eds., McGraw‐Hill Book Co., New York, N.Y.
4.
Easa, S. M. (1988). “Earthwork allocations with linear unit costs.” J. Constr. Engrg. Mgmt., ASCE, 114(4), 641–655.
5.
Jayawardane, A. K. W., and Harris, F. C. (1990). “Further development of integer programming in earthwork optimization.” J. Constr. Engrg. and Mgmt., ASCE, 116(1), 18–34.
6.
Lapinski, M. (1978). Road and bridge construction handbook. Van Nostrand Reinhold Co., New York, N.Y.
7.
Mayer, R. H., Jr., and Stark, R. M. (1981). “Earthmoving logistics.” J. Constr. Engrg. and Mgmt., ASCE, 107, 297–312.
8.
Oglesby, C., Parker, H. W., and Howell, G. A. (1989). Productivity improvement in construction. McGraw‐Hill Book Co., New York, N.Y.
9.
Pritsker, A. A. B. (1986). Introduction to simulation and SLAM II. Systems Publishing Corp., West Lafayette, Ind.
10.
Trueman, R. E. (1981). Quantitative methods for decision making in business. The Dryden Press, New York, N.Y.
11.
Tsimberdonis, A. I. (1993). “The use of discrete event simulation and failure cost profiles for optimizing heavy equipment management in earthmoving operations,” Doctoral dissertation, George Washington University, at Washington, D.C.
12.
Vorster, M. C., and De La Garza, J. M. (1990). “Consequential equipment costs associated with lack of availability and downtime.” J. Constr. Engrg. Mgmt., ASCE, 116(4), 656–669.
13.
Vorster, M. C., and Sears, G. A. (1987), “Model for retiring, replacing or reassigning construction equipment.” J. Constr. Engrg. and Mgmt., ASCE, 113(1), 125–137.
14.
Taylor, J. S. (1923). “A statistical theory of depreciation based on unit cost.” J. Am. Statistical Assoc., 1010–1023.
Information & Authors
Information
Published In
Journal of Construction Engineering and Management
Volume 120 • Issue 3 • September 1994
Pages: 522 - 535
Copyright
Copyright © 1994 American Society of Civil Engineers.
History
Received: Jun 21, 1993
Published online: Sep 1, 1994
Published in print: Sep 1994
Authors
Metrics & Citations
Metrics
Citations
Download citation
If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.