2.2. Downtime Costs

Try these first

1. 1.

   What does economic life refer to?

   Hint

   Think about cost efficiency over time.

2. 2.

   What is downtime?

   Hint

   Consider the impact on productivity.

3. 3.

   What is the economic life of a machine?

   • The time when costs are maximized
   • The time when costs are minimized
   • A period of time without any costs

   Hint

   Think about management strategies regarding expenses.

4. 4.

   True or False: Maintenance costs typically decrease as machinery ages.

   • True
   • False

   Hint

   Consider the relationship between machine age and upkeep.

5. 5.

   A fleet manager must decide whether to keep an excavator that has increased its downtime cost to 25% of its operating cost. If the excavator's operating cost is 800 rupees per hour, should the manager replace it or keep it, considering the annual increase in operating costs?

   Hint

   Think about the long-term costs versus immediate costs.

6. 6.

   Explain how technological advancements affect the economic life of machines. Provide examples of industries where this is particularly evident.

   Hint

   Consider how trends might shift demand in various sectors.