• Selection of the appropriate type and size of construction equipment
• Equipment availability
• Technology advancement
• Economic considerations, buy lease or rent
• Operating requirements
• Maintainance requirements
• Predictive maintainance
• Preventative maintainance

• Point of delivery
• Accessibility
• Position of temporary facilities
• Pattern of events

What are some constraints of 

Point of delivery

Site accessibility

Sequence of events

Location of temporary facilities

• The location and capacity of the equipment will influence the delivery point
• Work site should be accessible through the site equipment
• Equipment types and schedule will affect the sequence of construction activities
• Location of temporary facilities will be impacted by the location and properties of the equipment

• Type of construction project 
• Standard
• Special
• Replacement of construction equipment parts
• availability and price of spare parts
• Costs of owning and operating construction equipment
• The number of projects
• The type of projects
• Economic life of construction equipment
• Depreciation
• Replacement
• Investment
• Maintenance
• Obsolescence
• Site condition
• ground condition
• climate condition
• Owner requirement
• Schedule
• Quality
• Safety
• Manufacturer
• preference to work with a specific manufacturer
• Labour consideration
• automated equipment
• availability of trained labour

• Ownership cost and operating cost for running on projects
• Critical for bidding
• Replacement analysis
• Buy
• Lease
• Rent

• Purchase expense
• Maintenance
• Insurance
• Storage
• Taxes
• Slavage Values
• Tax Saving from Depreciation

• the cost to cover fire, left and loss of equipment
• premium payments to insurance companies

• Not covered in the ownership costs
• Major repairs and overhauls are included in ownership costs

• Commonly assessed at a percentage rate applied against the book value of the machine

• Between jobs
• Adverse weather conditions
• Typical storage expenses
• usually combined in an overhead account
• Allocated on a proportional basis to the individual equipment

• Value of machine at the time of its diposal. Cash inflow

• Depreciation will lessen the net cost of machine ownership
• The cost saving, the prevention of a cash outflow, is a result of protecting the company from taxes

A decrease in value of an asset due to wear, tear, deterioration and obsolescence.

Book value-original cost minus the sum of depreciation charged to date

Market Value-selling value (money) if sold in the free market

• Fuel
• Oil changes, filters, and grease
• Repairs
• Tires
• Replacement of High-Wear items

• Engineering Economy
• Collection of mathematical techniques which simplify economical comparisons and help us in choosing the most economical alternative
• Importan concept: Time Value of Money

• Enable the decision-maker to:
• Make more informed decisions
• which of the options provide the highest net benefit when considering all life cycle costs
• Account for the economic impact

• Equipment constraints
• Physically limited working life
• cost-limited economic life

• Short-term alternative to direct equipment ownership
• Advantages
• Opportunity to pick the well-suited machine for the job at hand
• A way to test a machine prior to a purchase decision
• to operate a specific equipment under actual project conditions
• Disadvantages
• Loosing the tax depreciation of equipment
• Limited number of equipment for rent-may not be available at peak construction operation
• Unavailability of some specialized or custom equipment for rent

• An alternative to direct ownership
• User (leasee) pays the leasing company (leasor) to use the equipment
• The lessor always owns the equipment
• Three different end-of-lease options
• Buy out
• Renew
• Return
• Advantages
• Both parties can agree upon the payments structure
• The lessor may provide the equipment management and servicing
• Disadvantages
• Expensive in the long run
• High insurance costs
• Certain limitations imposed by lessor
• Hard to cancel:termination fees and penalties

• Advantages
• More economical if the equipment is used sufficiently
• Readily available at the disposal of the owner
• Equipment is better maintained
• Disadvantages
• Substantial investment (ownership costs)
• Ownership may influence to use equipment
• beyond its economical life
• in lieu of more modern equipment