Canyon Mining intends to negotiate a long-term contract for haul trucks to use for surface mining, and a team from Censeo Consulting Group is tasked with developing a methodology to track cost changes over the past contract as input into the negotiation. The current project’s primary objective is to estimate the year-over-year trend in factory manufacturing margins for two different capacity trucks from two different equipment suppliers. These estimates are crucial to Canyon Mining, as the suppliers have indicated that prices have risen dramatically, and they seek large price increases in the upcoming negotiations. Although the team has arrived at current-year cost figures for the four haul trucks, it still lacks insight into cost trends and accurate cost forecasting.
