Factors affecting rate analysis (explain)

Rate analysis is the process of finding the cost of one unit of an item of work from the materials, labour and equipment needed, plus overhead and profit. The following factors affect the rate.

1. Location and lead: the distance of material sources from the site, and the lift; transport can double the cost in remote hills.
2. Availability and price of materials: local or imported, royalty, taxes and market fluctuations.
3. Wage rates and labour productivity: availability of skilled labour and the output per day.
4. Specification and quality: mix proportions, grade, thickness and finish.
5. Quantity of work: a large quantity lowers the unit rate.
6. Equipment and method: manual or mechanical work, the cost of machines and fuel.
7. Climate, season and site conditions: rain, altitude, access, soil and working space, height of work.
8. Time of completion: a short time needs more resources.
9. Norms and wastage allowances adopted.
10. Overhead, profit, taxes and the terms of the contract.

For example, the rate of brickwork in a remote hill district is much higher than in the Terai, because bricks, cement and sand must be carried a long way and skilled masons are scarce.