A cost analysis model for heavy equipment

Abstract

Total cost is one of the most important factors for a heavy equipment product purchase decision. However, the different cost views and perspectives of performance expectations between the different involved stakeholders may cause customer relation problems between the manufacturers and customers. Beginning with the conventional manufacturers’ cost view, this paper presents the necessity and importance of expanding the heavy equipment manufacturers’ cost scope to include the post-manufacturing customer stage of their products. Then, this paper narrates a general mathematics Post-Manufacturing Product Cost (PMPC) model to analyze the total costs of heavy equipment in its utilization stage. A major emphasis of the PMPC model is placed on the strategy of improving the manufacturers product cost management and the strategy of customers purchasing decisions cost management and their interdependencies as related to their specific different perspectives on the product utilization patterns.