9. Estimation of Economic Life

Try these first

1. 1.

   Define economic useful life in your own words.

   Hint

   Think about the profit to be made during a machine's lifespan.

2. 2.

   What is a defender in equipment management?

   Hint

   Is it the old one or new one?

3. 3.

   What is the economic useful life of a piece of equipment?

   • The time it is physically usable
   • The time with minimum costs
   • The time it will break down

   Hint

   What costs are most important to a business?

4. 4.

   True or False: All equipment should be used until it breaks down.

   • True
   • False

   Hint

   Think about maintenance costs.

5. 5.

   A construction company has a bulldozer that is 5 years old. Increased breakdowns are leading to downtime of 20%. Calculate the economic life based on the given productivity and repair costs, considering a maximum acceptable downtime of 10%.

   Hint

   Look at the costs associated with repairs versus the productivity loss.

6. 6.

   Your team is assessing a fleet of excavators, and you estimate that their operating costs increase as they age. Create an ideal plan for tracking their performance over time and determining the right replacement time.

   Hint

   Consider what key performance indicators would indicate the need for replacement.