Setting Up an Auto Repair Shop: Essential Calculations

Posted on Nov 18, 2024 in Mathematics

1. Market Study

New Building:

  • Sales of new vehicles by make, model.
  • Sales of used cars.
  • Cars in the workshop’s area of influence.
  • Number of similar workshops in the area.
  • Average size and turnover of local shops.

Transfer or Expansion:

  • Number of vehicles repaired per period.
  • Total hours billed per period.
  • Number of workers and their working hours.

2. Workload Calculation

New Building:

  • Number of fleet vehicles in the area (Pveh).
  • Market share (Mc).
  • Average time working on a vehicle (Hveh): Electromechanical (2-3 hr/veh), Plate-painting (6-9 hr/veh).
  • Index of visits to the workshop (Ivt): 1.2 – 1.6.
  • Potential customers (Pcl) = (Pveh x Mk) / 100.
  • Number of vehicles that can be repaired (Veha) = Pcl x Ivt.
  • Total annual work hours (Hta) = Veha x Hveh.

Workshop in Operation:

  • Vehicles repaired per month (Vehm).
  • Average time working on a vehicle (Hveh).
  • Total monthly hours (Htm) = Vehm x Hveh.
  • Vehicles repaired per year (Veha).
  • Total annual work hours (Hta) = Veha x Hveh.

3. Premises Dimensions

(Spreadsheet Application)

  • Number of Operators = Production Units (Unp) = Hta / HPR (ROUND).
  • Productive Hours (HPR) = HPot x Gap.
  • HPot = 1840 hours per worker per year.
  • Gap = 70-80%.
  • Jobs (PT) = Unp x Coefficient (ROUND).
  • Coefficient: Electromechanical = 1.5-2.0, Body = 2.0-2.5.

3.1 Repair Area

  • Surface repair (Sup(rep)) = PT x Sunit(rep).
  • Sunit(rep) = 35 m2.

3.2 Reception Area

  • Office reception area (Sup(ofirec)) = Receptionists x [Sunit(recepc) + Sunit(escl)].
  • Sunit(reception) = 10 m2.
  • Sunit(customer waiting) = 10 m2.
  • Receptionists = (Veha x TAveh) / HPot.
  • Veha: Vehicles repaired in a year.
  • TAveh: Average time per vehicle care = (Tacl x 2) / 60.
  • HPot: Potential hours per year.
  • Parking reception surface (Sup(ESREC)) = Unp x Sunit(ESREC).
  • Sunit(parking receipt) = 20 m2.
  • Reception Area (Sup(rec)) = Sup(ofirec) + Sup(ESREC).

3.3 Parking Zone

  • Parking surface (Sup(p)) = PT x Sunit(ap).
  • Sunit(parking) = 15 m2.

3.4 Offices and Other Areas

  • Dressing rooms and toilets (Sup1) = Unp x 3 m2.
  • Workshop Head Office (Sup2) = 10 m2.
  • After Sales Head Office (Sup3) = 10 m2.
  • Training Surface (Sup4) = 15 m2.
  • Management Surface (Sup5) = Unp x 5 m2.
  • Offices Area (Sup(official)) = Sum of Sup(i).

3.5 Parts Store Zone

  • Parts store area (Sup(alm)) = 0.3 x Sup(rep).

3.6 Exhibition and Sales Area

  • Exhibition and sales area (Sup(exve)) = 0.5 x Sup(rep).

4. Staff Organizational Structure

4.1 Direct Labor (MOD)

  • MOD = Unp = Hta / HPR = Hta / (HPot x Gap).

4.2 Indirect Labor (MOI)

  • Receptionists (Recep) = (Veha x TAveh) / HPot.
  • Veha: Vehicles repaired in a year.
  • TAveh: Average care time per vehicle = (Tacl x 2) / 60.
  • HPot: Potential hours in a year.
  • Remaining Manpower: MOI < 25-30% of total operators.
  • Workshop Head: 1 if operators = 5-7.
  • Team Leader: 0.5 for every 5 additional operators.
  • Aftermarket Head: 1 if workers > 10.
  • Stock Operators: 0.3 x Unp.
  • Administrative: 1 per 10 Operators.

5. Equipment, Machinery, and Tools

According to RD 1457/1986, minimum tool lists are established based on workshop type, a prerequisite for registration with the Ministry of Industry or equivalent.

LOGISTICS MANAGEMENT AND MAINTENANCE IN AUTOMOTIVE – AUTOMOTIVE 2nd

6. Financial and Economic Resources

Determine fixed and circulating assets to create a budget for business operations.

7. Cost-Hour Calculation

Determine the cost-hour to make decisions that improve productivity.

  • Total workshop cost (C1) = Fixed costs + expenses + semi-direct and indirect personnel costs.
  • Cost Time 1 (Ch1) = C1 / billable hours.
  • Margin per hour invoiced turnover (B) = b / billable hours.
  • b = turnover – turnover cost.
  • Margin per hour billed to paint materials (C) = c / billable hours.
  • c = paint bill of materials – cost of painting materials.
  • Cost/hour = Ch1 – B – C.
  • Cost/time budgeted for the future = (C1 – b – c) / (Hours available x productivity ratio x gain ratio in hours).
  • Productivity Ratio = Productive Hours / Hours available.
  • Ratio of gain in hours = Hours sold / productive hours.
  • Hours available = Unp x Hta.