CASE STUDY RESEARCH PAPER- REPORT ( 48 Hours - A+ Score Required)

Case Study Spring 2019

Construction Engineering 330 Principles of Engineering Economy

Professor Hemati

Rory Cornelius #19

Introduction:

Modern construction endeavors are highly mechanized and are becoming more advanced each day. With the construction industry becoming more industrialized, projects are becoming larger and heavy machinery is needed to complete them quickly and efficiently. Achieving productivity and efficiency is crucial for running a successful construction product and or business. During the construction phase, selection of the right equipment is a key factor in the success of any project. This decision is usually made by matching equipment available in a fleet with the tasks at hand. Such analysis accounts for equipment productivity, equipment capacity, and cost. With such a wide variety of options for one to attain the equipment needed for a job one can agree that construction will continue despite the preliminary bump.

The heavy civil aspect of construction practically relies on heavy equipment since most of the workload regards very strenuous labor. Wheel loaders, compactors, cranes, excavators, and scrapers are usually involved in heavy civil projects, so choosing the right one for the job can have a big impact on the profitability of a given job. One must consider the productivity and economic implications that a piece of equipment brings. Therefore, it’s important to choose the right equipment for the job and to choose the right company. Construction is one of the nation’s largest industry so there are many companies that compete to make the best machinery and equipment. In construction there are many ways to complete one job or task but there is always only one right and most efficient way. Choosing the machinery is one of the most important parts to that.

Abstract:

Freeways and arterials in the Mid-Coast Corridor are generally congested and traffic congestion is projected to increase more as the region grows. The population along the corridor is predicted to increase 19 percent by the year 2030, while employment is predicted to increase 12 percent.

The Mid-Coast Trolley will expand transportation capacity in the corridor to accommodate existing and future travel demand, particularly for peak-period commute trips. The project will provide an effective alternative to congested freeways and roadways for travelers and will result in fewer vehicle miles being traveled. The University City area has developed as a major employment and high-density residential area, like Downtown San Diego. Although University City is considered San Diego’s second downtown and UCSD is one of the region’s largest trip generators, neither is directly served by regional transit. The Mid-Coast Trolley extension will provide efficient transit connections to University City and UCSD, as well as frequent and reliable Trolley service throughout the corridor. Transportation models indicate that the new trolley service will attract 20,000 new transit riders a day to the system. The Mid-Coast Trolley extension route begins just north of the Old Town Transit Center and travels in existing railroad right-of-way and alongside I-5 to Gilman Drive. It crosses to the west side of I-5 just south of Nobel Drive and continues to serve the heart of the UC San Diego campus. It then crosses back to the east side of I-5 near Voigt Drive to serve the UC San Diego east campus and Scripps Memorial Hospital, transitions into the median of Genesee Avenue, and continues down Genesee Avenue to the UTC Transit Center. View Figure 1 below.

Figure 1- Map of Project

In the Mid-Coast Corridor, mobility hubs will serve to enhance access and connections to the Mid-Coast Trolley, making it easier to use public transit and other travel alternatives. Mobility hubs offer an array of transportation services, amenities, and urban design enhancements that connect transit to where people live, work, and play. Various modes of travel, including walking, biking, ridesharing, shuttle, bus, and light rail services come together to create a seamless travel experience. Supporting technologies such as real-time arrival information, electric vehicle charging stations, and mobile applications also improve convenience for users.

About 60 acres of land that is now spanning about 10.6 miles of where the trolley bride will be built will have to be altered meaning adding or removing dirt then grading. This is essential so that the trolley bridge will meet the required grade on the plans/specs. Along the 10.6 miles over 500 boring holes will have to be drilled for the foundations of the trolley bridge at a depth of 60ft.

Figure #2- Conceptual Drawing of Midcoastal Transit Extension Project.

McKinney Drilling is a drilling contractor in San Diego and plans to bid the job in order to be awarded it. They need to drill over 100 boring holes over the 10.6 miles each about 50ft deep and the machine they use must be mobile. McKinney Drilling can expect to start their portion of work in year, however, they knows that they do not currently have the equipment or manpower in order to successfully complete the job in a timely manner at the same time as they work on other jobs they have been awarded. As a result, they must decide to either buy new equipment or lease the equipment required to complete the job. The equipment most crucial to the drilling foundations is pile boring equipment. McKinney needs to choose the best option that results in the most productive, cost effective, and affordable option. The useful life of a pile boring machine is around 25,000 hours. McKinney has the following options:

1) Buy a Caterpillar TR220D Pile Driver with a diameter of 6-10in that had a max depth of 65m for $200,000 on a 48-month, 9% loan

3) Buy a IMF AF240 with a 15 inch max diameter and a max depth of 50m for $250,000 on a 60-month, 8% loan.

4) Lease the Caterpillar for $10,000/month

5) Lease the IMF AF240 for $12,000/month

The salvage value at the end of the loan will be $25,000 and $30,000 respectively cost of annual maintenance for the Caterpillar TR220D is $19,000 while the IMF is $12,000. The savings in labor costs for each will be $60,000 and $50,000.

The evaluation criteria are:

1. What option has a better productivity rate?

2. What option has a higher equivalent annual worth (EUAW)?

Economic Analysis:

The average cycle time is 5 minutes for the Caterpillar to drill 65m and 4.88 minutes for the IMF AF 240. Cycle time means the time it takes for the machine to complete once cycle of its work and repeat. The type of surfaces these pile boring machines will be working on is compacted and maintained earth, so the drill resistance is about 40 to 70 lb./ton. To calculate the productivity of the pile boring machines, we determine how fast each machine can drill to a certain depth assuming the soil is the same for both drill resistance for this job site is about 2.75 percent. The swell percent and swell factor were calculated to be about 20% and 0.83 for this job site since the material is earth, gravel and some clay. McKinney Drilling has determined the pile boring machines will work for 50 minutes per hour. The recorded drill speed per 10 ft is close to 1.4 min which is the maximum drill time for the Caterpillar therefore, each drill can carry out 9 cycles of the and the weight of the drill would be the same as the weight mentioned in the spec of the scraper. The IMF AF240 has a drill time of 1.2 minutes per 12ft and a load of 11 cubic yards per drill fill. Please see the two machines below in figures two and three.

Figure 3- Caterpillar TR220D:

Drill Time: 1.46 min

Dirt Removal Time: 5 min Return Time: 10 min

Turn at Fill: 0.21 min

Cycle Time: .14+.4+.5=10.4 min

Number of Drills per hour: 50 min/10.4= 5 Cycles per hour

Hourly Production: 5 cycles per hour× 9 lcy(loose cubic yards)= 45 lcy/hr taken out and 50 ft drilled in one hour

Daily Production: 50ft × 8hr/day= 400 ft/day

Production in bank cubic yard: 45lcy/day × 0.83 × 1.1= 41 bcy(bank cubic yards)/day taken out.

Days to complete work: 30,0000ft/ 400ft= 75days ⇒ About 75

Figure 4- IMF AF240

Drill: 1.2 min

Haul & Return Times for IMF AF24: Same as chart above.

Cycle Time: 9 min

Number of drills/hr: 50 min/9= 5.5Cycles/hr

Hourly Production: 5.5 cycles per hour× 11 lcy= 60.5 ft/hr

Daily Production: 60.5ft/hr × 8hr/day= 484 ft/day

Production in bank cubic yard: 484lcy/day × 0.83 × 1.1= 441.8bcy/day

Days to complete work: 30000ft /484 ft/day= 61 days

Equivalent Uniform Annual Worth:

EUAW of Caterpillar:

EUAW= -350000(A/P, 9%,4)-19,000(P/A,9%,4)+60,000(P/A, 9%, 4)+30,000(P/F,9% 4)

EUAW= (-350000)(0.3087)+41,000(3.240)+30,000(.7084)

EUAW= - 108,045+132,840+21,252= $46,047

EUAW of IMF AF240:

EUAW= -390,000(A/P, 8%,5)-12,000(P/A,8%,5)+50,000(P/A, 9%, 4)+35,000(P/F,9% 4)

EUAW= (-210,000)(0.2505)+38,000(3.993)+35,000(.6806)

EUAW=-97695+151734+23821= $77,860

Alternative Options- Rent from Machine Rentals:

Equivalent Annual Benefit from renting CAT TR220:

-100,000+60,000(P/A,9%,4)-19,000(P/A,9%,4)

=-100,000+41000(3.240)= $32,840

Equivalent Annual Benefit from renting IMF AF240:

-144,000+50,000(P/A,8%,5)-12,000(P/A,8%,5)

=-144,000+41000(3.993)= $51,734

Summary of Results:

When it comes to production rate the best option for McKinney Drilling would be to go with the IMF AF240 since it saves them about 41 days of work; however, it is a bit more expensive piece of equipment. The IMF AF240 can drill about 84 more feet per day which is a significant increase. This increase production would easily outweigh the extra increase in cost in the long run.

If you have two of these machines running the increased production in feet is 168, a substantially larger amount. The opportunity cost of going with the caterpillar option will result in less profits. Although a preliminary analysis of the present costs shows that the Komatsu is more expensive, the EUAW method will account for the time value of money and show how much this equipment can bring in. Equivalent annual worth analysis is necessary to determine how much of an impact each piece of heavy machinery will have on McKinney Drilling financials.

Conclusion:

Based off economical and production analysis it will be in McKinney Drilling best interest to pursue the IMF AF 240 for several reasons. The IMF has a higher drill dirt fill capacity which means more dirt can be transported and taken out. Also, the production rate of the IMF AF240 compared to the Caterpillar is about 12.80% more loads daily. These statistics add up considering the IMF AF240 would be able to finish the job earlier than the caterpillar. This drill brings in a staggering $77,860 yearly which is $26,126 more than the option closest to it. I would recommend McKinney Drilling to make an investment in this piece of heavy machinery and to buy it instead of renting it since it’ll bring a substantial amount of economical profit to the company each year. In the construction time is very important and can either make or cost a company a fortune. Therefore, it’s so important to choose machinery that has a fast and efficient production rate and cycle time. I also recommend buying this machine as opposed to leasing because drilling/boring is McKinney’s Drilling primary business. As a subcontractor this is what they specialize in. Because of this they will get their full money’s worth from the machine by using it often enough assuming there are construction jobs available and the economy is doing well. In addition, the IMF AF240 would allow McKinney Drilling to finish in the allowed allotted amount of time.

Works Cited

· Project Overview. (n.d.). Retrieved from https://www.keepsandiegomoving.com/Mid-coast/midcoast-intro.aspx

· Specs, Ritchie. “CATERPILLAR TR220D SERIES II MOTOR Drill.”Caterpillar TR220D+Series+II Motor+Scraper, www.ritchiespecs.com/specification?type=Construction&category=Motor%2BScraper&make=Caterpillar&model=613C%2BSeries%2BII&modelid=94116.

· (n.d.). Retrieved from http://supplydrillingrigs.com/1d-rotary-drilling-tr220.html

· Drilling rig. (2019, April 13). Retrieved from https://en.wikipedia.org/wiki/Drilling_rig

· Project Overview. (n.d.). Retrieved from https://www.keepsandiegomoving.com/Mid-coast/midcoast-intro.aspx

· PROJECTS :: San Diego's Regional Planning Agency. (n.d.). Retrieved from https://www.sandag.org/index.asp?projectid=250&fuseaction=projects.detail