2 Hiii.i.' !:)'<i'T'iiir-^ TEt}ix'iC;^nJioT.Ry.AL 



homely illustration, while ser\ing'"hC'.c«nter our attention on certain 

 important subjects to he taken uiJ-rfi- Vliis paper, falls short in resjiect 

 of others that can not be neglected in engineering cost studies. 

 Broadly speaking, engineering cost studies deal with the comparati\e 

 annual costs of alternative projects. Frequently they also invo!\e 

 comparisons of expenditures to be made at different times in the 

 future. They are of value to industrial executives in assisting ihcin 

 to arrive at decisions where several courses of action are open. Imi 

 they are nut ilie sole guides in arriving at decisions. No hard and 

 fast formulae can l.ike liu- place of judgment based on experience. 

 I'nrnuilae of this naturt- are |)n)periy used as guides to assist jud.unu'nl . 



The necessit\- for guidance from studies of this kind arises most 

 frequently in a growing i)lant. The telephone plant always has 

 been, and .so far as we can anticipate, will continue to be a rapidK' 

 growing thing. 



This means that whenexer an addition is to be maile, the cjuestion 

 arises, how much cai)acity for growth is it most economical to pro\ide 

 for? As an illustration of this, consider with me the proljlem that 

 arises when it becomes necessary to place somewhere an undergroimd 

 cable. Obviously it would be imeconomical to construct an under- 

 groimd conduit of one duct for this cable and next year or the >ear 

 atler to dig uji the street and lay another ditct for a second cable 

 and sii on in i>iecemcal, hand-tn-iiioiitii fashinn. 



< 111 the iitiier liaiKJ. it would not lie ecunomira! In oliinate the 

 iuhiiIkt ot cai)les that \\(juld be recjuired in a hundred years, e\en if 

 we could foresee the needs so far ahead with any degree of certainty, 

 and to place at the outset sufficient ducts to care for all the cables 

 re(|uired along that route in the next century, for in that event, the 

 carr>ing charges on the idle ducts would prove much more expensi\e, 

 in the long run, than woidd additions made at infrec|uent intermediate 

 limes. Somewhere between one \ear and one hundred years is the 

 most economical period for which to pro\idc duct capacity in ad- 

 vance. The determination of this period, based on suitable con- 

 struction costs, the expected rate of growth in r,ii>le leciiiifemenls, 

 and other factors is one of the useful results obtained from an engi- 

 neering cost sliid\-. 



I'lider our organizalion, practicalh' all t\pes of plant and e(|iii|)- 

 nieiit are <le\eloped by the Central Staff. These are slan(lai<lize(l 

 in a range of sizes sufficient to meet all the needs of the business. 



The choice of standards and sizes to meet specific situations arising 



