Set one comparable decision contract
Record these assumptions before calculating
- Dispatch-to-return time, not only on-site time. (not complete)
- Loaded labour cost and vehicle/equipment cost on compatible units. (not complete)
- Direct materials and subcontractors for the job. (not complete)
- Schedule utilisation and gaps across the planning period. (not complete)
- Failed-access, callback and collection boundary. (not complete)
field-job contribution = customer price - mobilisation cost - travel cost - on-site labour cost - direct job cost - expected failure/callback cost
- mobilisation cost
- Dispatch, preparation, loading, setup and minimum diagnostic resource (CU per visit) — time and cost record
- travel cost
- Travel labour plus vehicle and route-specific cost included in scope (CU per visit) — route, payroll and vehicle record
- expected failure/callback cost
- Explicit scenario for failed access, repeat travel or warranty callback (CU per job) — comparable job record or scenario
Keep one currency, indirect-tax basis, time horizon and cost boundary throughout. Scenario values below are invented currency units (CU), not benchmarks.
Worked example: Field-Service Economics: Travel, Labour and Capacity
Invented tax-exclusive visit: 260 CU customer price; 35 CU mobilisation, 50 CU travel, 80 CU on-site labour, 40 CU materials and 15 CU expected callback cost.
| Line | Calculation | Result |
|---|---|---|
| Included job cost | 35 + 50 + 80 + 40 + 15 | (220 CU) |
| Job contribution | 260 - 220 | 40 CU |
| Contribution margin | 40 ÷ 260 | 15.4% |
| Price at zero contribution | included cost | 220 CU |
| Case | Changed input | Decision result |
|---|---|---|
| Dense route | Travel cost 30 CU | 60 CU contribution |
| Base | Travel cost 50 CU | 40 CU contribution |
| Long route | Travel cost 90 CU | 0 CU contribution |
Reconcile the day-capacity waterfall before setting recovery
| Capacity layer | Unit and record | Treatment | Recovery decision |
|---|---|---|---|
| Paid or owner time | Hours per day from the roster or owner-time record | Starting capacity; not automatically sellable | Keep the same day and labour-cost basis |
| Travel and setup | Recorded route, dispatch, loading and setup hours | Subtract once from paid time | Enter vehicle cost separately on the same route scenario |
| Productive service time | Completed on-site hours after travel and setup | Capacity available to recover service cost | Test call-out, travel and service recovery without double counting |
| Schedule gaps and failed visits | Observed or labelled hours per day | Separate from completed productive time | Stress the day before setting the quote structure |
Use the exact calculation owner
- Trade Call-out Fee Planner
Set a minimum call-out fee from mobilisation, travel, diagnostic time and displaced capacity
- Travel Time Billing Planner
Recover travel delivery cost
- Mobilisation Cost Recovery Planner
Set a mobilisation charge from setup, travel, permits and idle capacity
Turn the calculation into an operating decision
- Measure the whole visit cycle.
- Separate mobilisation, travel, on-site labour and materials.
- Allocate vehicle and equipment on a supportable driver.
- Add observed failed-access and callback scenarios.
- Test route density and daily capacity.
- Quote transparently and reconcile the completed job.
- Pricing only billable on-site time.
- Counting travel labour but not vehicle cost, or vice versa.
- Dividing daily cost by a fully booked day that rarely occurs.
- Hiding callback and failed-access cost.
- Using revenue per visit without contribution or capacity.
Questions to settle before acting
- Should travel be a separate customer line?
- That is a commercial decision. Keep it separate in the internal model even if the customer sees one bundled price.
- How should schedule gaps be treated?
- Model realistic sellable visits or hours for the period. Do not spread cost over theoretical full utilisation.
- What if a callback is chargeable?
- Separate expected recovery from expected callback cost and apply the reviewed service terms.
Sources and methodology
- Field-Service Economics: Travel, Labour and Capacity: calculation boundary — Margin101: Formula, unit, assumption and limitation reference for the primary decision handoff.
- Vehicle Cost Calculator — U.S. Department of Energy Alternative Fuels Data Center: Illustrates vehicle-cost components; no route or vehicle default is imported.