Joseph S. DeSalvo
Published: 1968
Total Pages: 358
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Statistical and engineering methods both possess advantages and disadvantages in the determination of cost behavior. This paper illustrates a wedding of the two approaches for the case of rail costs. The statistical approach of Meyer, Peck, Stenason, and Zwick is used for all cost components except linehaul and equipment depreciation. An engineering process function is used along with input costs to develop linehaul costs. Depreciation costs for cars and locomotives are estimated from equipment prices and estimated lifetimes. The resulting statistical-engineering cost function permits a detailed estimation of the cost of a train trip. It is much more flexible than the pure statistical approach as it permits changes in equipment, roadway, and loading conditions. In addition, it includes costs not amenable to engineering analysis, such as selling and administration. (Author).