Optimum Size of Equipment

Generally speaking, equipment of greater capacity yields lower unit costs than does equipment of lesser capacity. However, this is not true when the equipment is employed in an operation consisting of at least one activity that is independent of and at least one other activity that is dependent on the size or capacity of the equipment relative to combined output. In this case there exists an optimum size or capacity of the equipment that yields the minimum total unit cost for the combined independent and dependent activities. These relationships are explored herein and the equation for finding the optimum size or capacity of the equipment is derived. An example gives the economical size of the backhoe used both to excavate the trench and lay the pipe for a storm sewer pipe culvert.