Proper equipment replacement timing the key to replacement economy

CIM Bulletin, Vol. 73, No. 823, 1980

R.E. STEWART, President, Textor Data Systems Limited Toronto, Ontario

Using the concept of economic life and marginal analysis, it can be shown that proper equipment replacement timing can save a mining company many thousands of dollars. To assist management with determining the economic life of mining equipment, a new computer package has been developed. The package, called ERG (equipment replacement guide), incorporates all important economic factors related to equipment usage, such as operating costs, maintenance costs, salvage values, depreciation, volume of work, tax credits, inflation rates, ROI, etc. The information is used in a series of equations which balance the costs of new equipment against the total cost of old equipment. The solution of the equations determines economic life and the point in time when the old equipment should be replaced.
Keywords: Equipment, Maintenance, Economic life, Marginal analysis, Computers, ERG system.