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 Maintenance Management ( EM 664 )
Maintenance Labour Cost Estimation
Labor costs are made up of payroll information that is usually obtained from
labor distribution reports prepared by the accounting department.
The information is required for four key areas:
1. Total number of hours worked annually on a per-employee basis
2. Hourly cost of employee benefits on a per-employee basis
3. Ratio of cost of annual benefits to yearly wages
4. Base pay rates per hour by labor grade
The cost per employee is expressed by
Cem = LR (1 + BR) TAH
where
Cem = cost per employee,
LR = hourly labor rate,
BR = benefit ratio,
TAH= total number of annual hours.

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 Maintenance Management ( EM 664 )
The total labor cost is given by
TLC = Cem * N
where
TLC = total labor cost,
N= number of employees.
Standard Hourly Cost Estimation
Csh= PD FBF / PHP + EPHP
where
Csh= cost per standard hour produced,
PD = payroll dollars per period,
PHP= planned hours produced,
EPHP = equivalent planned hours produced,
FBF= fringe benefit factor.

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 Maintenance Management ( EM 664 )
Manpower Repair Cost Estimation
RC = (1 RSF) Cum
where
RC = repair cost with respect to manpower,
Cum= unit repair cost with respect to manpower,
RSF =repairable shrinkage factor due to loss, damage, etc. Its values are tabulated in
Reference 8 and vary from 0 to 0.1375.
= number of repairable units failing over the system lifespan.
The number of repairable units failing over the system lifespan is given by:
= * nr * LS * Ho
Where
LS= system life; in Reference 8 it was taken as ten years,
Ho= operating hours per year,
nr= total number of repairable items,
= item constant failure rate.

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 Maintenance Management ( EM 664 )
The unit repair cost with respect to manpower is expressed by
Cum= MCH AMHPR MUF
where
MCH =manpower cost per hour including overhead,
AMHPR = average number of man-hours per repair action,
MUF =manpower use factor and its values are tabulated in Reference 8. The
tabulated values vary from 3 to 1.04.
Corrective Maintenance Labor Cost Estimation
CMal= SOH LCH MTTR / MTBF
where
CMal= annual corrective maintenance labor cost,
LCH = corrective maintenance labor cost per hour,
SOH = annual scheduled operating hours.

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 Maintenance Management ( EM 664 )
Maintenance Material Cost Estimation
The total cost of stock or stores at the time of repair is given by:
TCS = PDC + IC + (WI PDC) + (0.01 T PDC) + (0.1 PDC)
= WI + IC + [(T PDC) + (10 PDC) / 100]

where
TCS = total cost of stock or stores at the time of repair,
PDC = present value of the inventory item cost including
purchase price and delivery cost,
WI = worth of the inventory item after n periods,
IC = inventory cost per item,
T = time, expressed in months, the stock item is in inventory.

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 Maintenance Management ( EM 664 )
Equations for calculating PDC, WI, and IC are given below, respectively
PDC = w PP (1 + LS + Lu) SM
WI= PDC (1 + i)n
IC = FSC B / K R
where
PP = purchase price of material per unit; more specifically, the delivered price,
Lu = losses generated by the unused stock returned to inventory that is too
small for future use,
w = weight/other unit of quantity of material used,
SM = unit price of material salvaged,
LS = losses due to scrap, skeletons, chips, etc.,
i = interest rate for a specified period,
n = number of interest periods,
FSC = annual floor space cost per square foot,
B = bin size expressed in square feet,
R = reciprocal of years item normally spends in inventory,
K = average number of items stored in bin.

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