7.1. Physical Life

Try these first

1. 1.

   What are the phases of equipment life?

   Hint

   Think about what happens from the moment you buy a machine until you no longer use it.

2. 2.

   Define defender and challenger.

   Hint

   Think about what terms are used when discussing current vs potential equipment.

3. 3.

   What is the economic useful life of a machine?

   • The period of minimum costs.
   • The period when equipment can work.
   • The time before a machine breaks down.

   Hint

   Think about cost issues related to maintenance.

4. 4.

   True or False: The defender is always the new equipment.

   • True
   • False

   Hint

   Reflect on which is being used versus which is waiting for replacement.

5. 5.

   Consider a mid-sized construction company that has a crucial excavator aging at 10 years. Its maintenance costs begin rising past 30% of its value. What should the company evaluate to determine if it should replace the excavator?

   Hint

   Factor in the diminishing returns from the old machine versus the net benefits of the new one.

6. 6.

   An equipment manager notices his older model truck spends more time in the shop than on-site. What metrics should he consider to justify its replacement?

   Hint

   Evaluate all costs associated with downtime and impacts on project deadlines.