4.1. Purchase and Use

Try these first

1. 1.

   What is the first phase of equipment life?

   Hint

   Think about the lifecycle steps.

2. 2.

   Define economic useful life.

   Hint

   Look for the focus on costs.

3. 3.

   What does economic useful life refer to?

   • Time to recover purchase cost
   • Time when costs are minimized
   • When a machine is scrapped

   Hint

   Focus on minimizing costs.

4. 4.

   True or False: Downtime has no effect on productivity costs.

   • True
   • False

   Hint

   Consider how work schedules are affected.

5. 5.

   A construction firm needs to determine whether to replace an aging crane. List the costs associated with keeping the current crane versus purchasing a new one. What factors would influence your decision?

   Hint

   Consider both quantitative and qualitative factors.

6. 6.

   Create a replacement timeline for an excavator that is critical for a construction project. What indicators would signal the need for replacement?

   Hint

   Look at both the performance metrics and market trends.