Estimating Costs

TM 38-260

(b) The cost of financing the inventory and disposing of scrap and surplus materials

must also be considered.

(2) The cost of labor, tools, amortized capital equipment, maintenance storage space,

utilities, production controls, and industrial engineering must be taken into consideration.

(3) The cost of documentation is another factor to be considered. This includes such

items as GBL, Commercial Bills of Lading (CBL), and various Department of Defense forms

used in declarations and inventory movement reports.

(4) The cost of damage and/or the repair or replacement factors cannot be ignored.

Extensive damage to IPE could render the equipment unrepairable and consequently a total loss.

(5) The cost of administrative services must be included. These costs consist of training,

research operations, specification and contract review and negotiation, and maintaining a

technical library.

8-30.

Estimating Costs

a. A few years ago, packaging specialists had very few sources of information to use when

estimating PCH&T costs. Many relied on their own experience to estimate these costs.

b. Today, the packaging specialist has several sources of information that will assist in

estimating PCH&T costs. One of these is the cost matrix of Appendix B.

8-31.

PCH&T Cost Matrix

Whenever IPE is prepared for storage or shipment an analysis shall be made to determine the actual costs involved. The

PCH&T cost matrix is helpful in estimating PCH&T contracts. The cost matrix is for illustrative purposes only and does

not necessarily reflect current material prices. Also see Appendix B for accompanying examples and instructions.

8-32.

Changes from Previous Issues

Marginal notations are not used in this revision to identify changes with respect to the previous issue due to the extensive

number of changes.

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