A STUDY ON COST CALCULATION AND ANALYSIS OF LOGGING SYSTEM
Su Yi ( Department of Forestry Industry )
This paper described a theoretical methodology for calculating costs and optimum lifespace of logging equipment with considering interest rate of investment. The cost analysis provides important clues to equipment efficiency, which leads to logging corporation efficiency. For this reason, it is appropriate to discuss how equipment costs play a key part in the relative success or failure of logging corporation. The total cost of using logging machine can be classified under two heading, ownership and operating, which break down as follows. 1 . Ownership costs: depreciation , investment, interest, taxes and insura-nce;2 . Operating costs, maintenance cost,fuel consumption, lubricant costs, tire costs and labor wages. All costs and expenses illustrated in this presentation are of examples and of methods. Economic life of logging equipment is A period in which the total machine costs are the lowest. A logging equiment siould be replaced when the total of its cumulative costs will exceed or equate the lowest costs. A calculating equation is as follows. Where; Sn……the total of its cumulative yearly costs. C……the operating costs; n……the operating years; i……the interest rate of investment. Namely, the logging equipment should be obsolete when its operating costs in next year will equate or exceed the total of its cumulative yearly costs.