4. Module 3 - Equipment Life and Replacement Analysis

Try these first

1. 1.

   Define economic life in the context of equipment management.

   Hint

   Consider how the concept relates to costs.

2. 2.

   What is cost minimization?

   Hint

   Think about expenses versus benefits.

3. 3.

   What determines the economic life of equipment?

   • Initial cost
   • Maintenance costs
   • Both A and B

   Hint

   Consider all costs associated with equipment.

4. 4.

   True or False: Profit maximization focuses solely on reducing costs.

   • True
   • False

   Hint

   Think about what actions relate to maximizing profit.

5. 5.

   Analyze a situation where increasing downtime of machinery leads to profitability issues. How would you decide when to replace the equipment?

   Hint

   Consider more than just immediate costs; look at long-term implications on project productivity.

6. 6.

   A company experiences obsolescence due to faster technologies replacing their equipment. How should they approach future replacements?

   Hint

   Think about how adaption to innovation influences equipment policies.