Optimal Age for Equipment Replacement
Decision Making for Equipment Replacement:
The Best Time to Replace Equipment
The performance of almost everything declines with age such as machines. Although a routine maintenance can keep the equipment working efficiently, but there comes a point when the repairs are too expensive and it is less expensive to buy a replacement.
Enter up-to-28 pairs of (Resale value, and the Running cost in previous period) starting from age 0. For the first column, that is, for age zero, the "resale value" is the price, and its "running cost" is always equal to zero. After entering the data correctly, then click the Calculate button. Blank boxes are not included in the calculations but zeros are.
In entering your data to move from cell to cell in the data-matrix use the Tab key not arrow or enter keys.
To edit your data, including add/change/delete, you do not have to click on the "clear" button, and re-enter your data all over again. You may simply add a pair of numbers to any blank cells, change a number to another in the same cell, or delete a number from a cell. After editing, then click the "calculate" button.
For Technical Details, Back to:
Decision Making in Economics and Finance
Kindly email your comments to:
Professor Hossein Arsham
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