Agricultural Engineering

1. COST ANALYSIS

2. COST ANALYSIS
•COST OF IMPLEMENT
•COST OF POWER SOURCES
•COST IS OF TWO TYPES
•FIXED COST
•VARIABLE COST

3. FIXED XOST
DEPRECIATION COST
INTEREST
TAXES
INSURANCE
SHELTER

4. VARIABLE COST
REPAIR AND MAINTENANCE COST
LABOUR COST
FUEL COST
OIL AND LUBRICATION COST

5. Cost calculation requires life of a
machine
Life of machine:
–Service life
–Economic life :
8– 12 YEARS FOR AGRICULTURAL
MACHINES
10 YEARS FOR TRACTOR OR 10000
WORKING HOURS

6. USEFUL LIFE OF SOME AGRIL MACHINERY

7. SALVAGE VALUE
IT IS THE VALUE OF THE MACHINE
AFTER THE END OF THE ECONOMIC
LIFE OF A MACHINE
NORMALLY TAKEN AS 10% OF THE
MACHINE PURCHASE PRICE

8. CALCULATION OF FIXED COST
(DEPRECIATION)
DECREASE OF VALUE OF MACHINE WITH
RESPECT TO TIME
– PARTS OF MACHINE BECOME WORN OUT AND
CAN NOT PERFORM AS EFFECTUIVELY AS
PREVIOUSLY
– INCREASE OF OPERATING COST AS MORE
POWER, LABOUR, REPAIR AND MANTENANCE
COST
– MACHINE OBSOLENCE : NEW AND MORE
EFFICIENT MACHINE OR PRACTICE AVAILABLE

9. DEPRECIATION MORE LIKELY A
FUNCTION OF
– TIME FOR LOW USE MACHINES
– MACHINE OBSOLENCE
– DETERIORATION OF MACHINE FOR HIGH
USE MACHINES

10. DEPRECIATION
ESITMATED VALUE METHOD
STAIGHTLINE METHOD
DECLINING BALANCE METHOD
SUM OF DIGITS METHOD
SINKING FUND METHOD

11. INTEREST COST
I = [(P + S) / 2 ] * INTREST RATE (ANNUAL)
– P= PURCAHSE PRICE
– S = SALVAGE VALUE
– I = INTEREST / YEAR, IN DECIMAL
If interest rate is not known, then 12 % interest /
annum should be considered
– I/H = INTEREST PER HOUR
– H= ANNUAL USE IN HOURS

12. INSURANCE , TAX AND SHELTER
INSURANCE AND TAX = 2 % OF
PURCAHSE PRICE
SHELTER: 1.5 % OF PURCAHSE PRICE

13. VARIABLE COST
REPAIR AND MAINTENANCE COST
– DIFFICULT TO ESTIMATE
BECAUSE
– WIDE VARIATION IN OPERATING CONDITION
– MAINTENANCE SCHEDULE
– LOCAL COST
– PROPER ASSESMENT BY SURVEY OF LARGE
NUMBERS OF FARMS
– R&M COST INCLUDES ADJUSTMENT FOR WEAR,
DAILY SERVICE, LUBRICATION. COST OF PARTS AND
LABOUR
– REPAIR COST DEPENDS ON USE (HOURS/ ANNUM,
OPERATOR SKILL
– AVERAGE COST IN TERM OF PURCAHSE PRICE IS
TAKEN

14. FUEL COST
FUEL COST ESTIMATED IN THE FIELD
– TANK REFILLING METHOD
– MICRO OVAL TYPE PULSE SENSOR
THEORITICAL ESTIMATION
– Fuel consumption / h
PTO equivalent power (kW)/ 2.47kW –h/l
As per Nebraska tractor testing, DBP is 54% of maximum
PTO power
Fuel Consumption = 0.54xPTO power (Max),kW/ 2.47kW –h/l
– Fuel consumption/ ha
PTO equivalent power (kW)/ [(2.47kW–h/l) x A.F.C)]

15. LUBRICATION COST
2.5 to 3 % OF THE FUEL COST
LABOUR COST
ACTUAL LABOUR RATE / DAY

16. Total Cost
Fixed cost + variable cost = Cost of
operation
(Depreciation + Interest + Insurance & Tax
+ Shelter) + R & M Cost + Fuel + Oil &
Lubrication+ labour) = Cost of operation