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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).
About This Book Cost Function Of Indian Railways Is Based On A Dissertation Submitted To The University Of Delhi For The Award Of Ph.D.Degree. It Carries Forward Some Of The Work Done On The Subject By Certain Others. The Book Breaks New Ground On The Study Of Cost Function Of Multiproduct Industry Under-Going Structural Changes Over Time. Some Of The Techniques Used As Also Some Results, May Become The Subject Of Serious Debate In The Years To Come. The Book Contains Some Unconventional Approaches To The Analysis Of Cases In Rail-Transportation In General And Transport Industry In Particular.