1.
Problem
recognition, definition and evaluation
At the end of 2012 we were preparing 2013
budget for tanker vessels, in order to support operational preparation for next
year. Tanker budget consist of several components such as bunker cost, charter
cost, operating cost, port expenses, risk mitigation cost and depreciation. As a Ship Owner & Ship Manager our main
concert for budgeting is operating cost. This blog talk about tanker operating cost
estimation using WBS and some model base on chapter 3 Engineering Economy
books.
2.
Development
of the feasible alternatives
Estimation calculation will compare using some
parameters that is Drewry Operating Cost Index, Indonesian inflation index and linear
regression from last 4 years OPEX realization.
3.
Development
of the outcomes
Cost component using WBS for Tanker Operating Cost as
shown below:
Figure 1: WBS Tanker OPEX
Parameters used for Cost Estimation Calculating:
Drewry Operating Cost Index
Figure 2: Drewry operating cost index
Base on figure 2, obtained index from 2009 until
2013 as follow:
Indonesia Inflation Index
Figure
3: Indonesia Inflation Index
Mean data from 2009 – 2012 Indonesia inflation rate
is 5.
4.
Selection
criteria.
The best estimating budget will determine
base on highest result from 3 parameter result as long as the result lower than
internal standard charter rate similar vessels and International standard.
5.
Analysis and comparison of the
alternatives
Calculation
examples for Tanker 30,000 DWT (Type MR) with YOB 2005 and cargo white oil:
6.
Selection of the preferred alternative
Base
on calculation above, shown that using Indonesia Inflation Index (mean 5%) is
the highest result with 4,676 USD/day. Otherwise in internal rate for MR is
6500 – 8000 USD/day and data international standard from Drewry is 8,440
USD/day.
7. Performance Monitoring & Post
Evaluation of Result
The result of 3 parameter above are regular vessel MR type operating cost
exclude docking, damage, deductable and special repair. So the budget will increase
if Ship Manager has plans to upgrade/improve vessels technically. Usually Ship
Owner increase Ship manager budget around 10%-20%.
Drewry Index seems the lowest ones because Drewry standard base on
International tanker market which is sensitive with global economic condition, global
conflict and force major condition. Crisis in Middle East and global crisis in some
Country make tankers market fall and operating cost index going down from 2011.
Reference:
i.
Maritime Research, Drewry.
(2012). Ship Operating Costs Annual Review and Forecast (annual report
2012/2013), Section 3 Operating Cost Oil
Tanker.
ii. Indonesia Inflation Rate, retrieved from:
iii. William G.
Sullivan, Elin M. Wicks, and C. Patrick Koelling (2011), Engineering Economy
(15th Edition), Chapter 3
Another AWESOME case study Pak Irawan.....
ReplyDeleteMy only challenge to you is where did you get the 5% inflation factor? Given that most governments intentionally UNDERSTATE (manipulate) the inflation rate what would happen if you used a "real" inflation rate?
In the USA, the government has consistently understated the real or true inflation rate by 3-4%. So assuming the Indonesian government does the same, what does this to to you calculations?
And just for a "reality" check, ask your wife how much your grocery bill has increased in the past year? I guaranty you it is more than 5%.
What I would urge you to do for your next post would be to take the same case study but this time, try to factor it for the REAL inflation rate. (See Chapter 8 in your Engineering Economy, not just Chapter 3)
Another possible blog posting from this same case study. Instead of trying to use indices published by the government, why not try to use Gold Equivalency? That index does NOT lie.... It will give you the true or real inflation adjusted costs in real or current dollars (or rupiah or any other currency)
Keep up the good work but challenge yourself to use some of the more sophisticated tools/techniques in Engineering Economy....
Also, watch your citations.....http://owl.english.purdue.edu/owl/resource/560/08/ You are still making some basic and foolish mistakes which will cost you points if you make the same mistakes on your papers....
BR,
Dr. PDG, Jakarta