REPLACEMENT VALUE COSTING CONCEPTS AND METHODOLOGY

The study, funded by Canadian National, is essentially a conceptual examination and critical analysis of replacement value costing principles as they might be applied to railway operations. The recommendations, concerning the use of a replacement value system, particularly address the selection of cost information pertinent to the service pricing decision. Freight car capital charges are an important and relatively uncomplicated component of unit costs, and hence were chosen as an example. The development was directed towards the determination of a realistic unit capital charge per unit time (cost per car per year). For pricing purposes, this must ultimately be converted to a charge per unit of service, possibly on an individual movement basis. It is significant to note that the freight car costing question is simpler than certain companion issues, particularly the problem of applying replacement value to the fixed way. Study of this has been incorporated into the Road Maintenance Cost Model project. In general, a simple uniform set of rules, that are applicable to a broad range of circumstances, must be the ultimate objective of this research.

• Supplemental Notes:
  • Sponsored by Canadian National Railways.
• Corporate Authors:

  Canadian Institute of Guided Ground Transport

  Queen's University
  Kingston, Ontario K7L 3N6,   Canada 
• Authors:
  • Lake, R W
  • MacDonald, J A
  • SCHWIER, C
• Publication Date: 1977-6

Media Info

• Features: Appendices; Figures; Tables;
• Pagination: 26 p.

Subject/Index Terms

• TRT Terms: Analysis; Capital investments; Costs; Depreciation; Economic analysis; Fleet management; Freight cars; Freight traffic; Planning; Pricing; Rates; Return on investment
• Uncontrolled Terms: Cost analysis; Freight rates
• Old TRIS Terms: Fleet planning; Freight car investment; Replacement value costing
• Subject Areas: Economics; Finance; Freight Transportation; Planning and Forecasting; Railroads;

Filing Info

• Accession Number: 00163806
• Record Type: Publication
• Source Agency: Canadian Institute of Guided Ground Transport
• Report/Paper Numbers: CIGGT-77-7 Final Rpt.
• Files: TRIS
• Created Date: Nov 9 1977 12:00AM