Materials & Resource Management Flashcards

Owning a loader costs $60,000/yr fixed plus $40/hr to operate. Renting it costs $100/hr including operation. At how many hours per year do the two options cost the same?

Answer: 1,000 hours

60,000 ÷ (100 − 40) = 1,000 hours; above that, owning is cheaper.

Under an 80% learning curve, the first unit takes 100 labor hours. How long does the 4th unit take?

Answer: 64 hours

Each doubling of units multiplies unit time by 0.80: unit 2 = 80, unit 4 = 64 hours.

Materials currently cost $500,000. With 4% annual escalation compounded, what is the expected cost if bought 2 years from now?

Answer: $540,800

500,000 × 1.04² = 500,000 × 1.0816 = $540,800.

Annual material usage is $1,200,000 and average inventory is $300,000. What is the inventory turnover ratio?

Answer: 4

Turnover = annual usage ÷ average inventory = 1,200,000 ÷ 300,000 = 4.

On owner-furnished (free-issue) materials, the contractor usually remains responsible for:

Answer: Receiving, storing, protecting, and installing the materials

The owner buys the materials, but the contractor normally takes care, custody, and control once they are delivered.

Which is generally the most cost-effective way to handle unused surplus material at project closeout?

Answer: Return it to vendors for restocking credit or transfer it to other projects

Restocking credits and transfers recover more value than scrapping or indefinite storage.

What effect does sustained scheduled overtime (e.g., several weeks of 60-hour weeks) usually have on labor?

Answer: Productivity drops because of fatigue, raising cost per unit of work

Studies show long-running overtime cuts hourly productivity, so the extra hours return less than their cost.