Replacement theory
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Replacement theory
The document discusses replacement theory, which determines the optimal time to replace equipment or machines that deteriorate over time. It increases maintenance costs as equipment ages. The document provides examples of industries that use replacement theory and outlines the methodology. It presents a sample replacement problem looking at the purchase price, annual running costs, and resale values to determine the year when replacement is most economical based on minimum average total cost. The optimal replacement period is calculated based on rules comparing maintenance costs to average costs or scrap value.
Replacement model
This document discusses replacement theory and models for determining optimal replacement times for equipment and components. It covers different types of failure mechanisms including gradual, sudden, progressive, and retrogressive failure. Key factors in replacement decisions are purchase costs, salvage values, maintenance costs, and operating costs. Optimal replacement minimizes total average costs over the lifetime of the item. Group replacement policies can be more cost effective than individual policies for items that fail suddenly by replacing items in a group before failures occur.
Replacement Theory Models in Operations Research by Dr. Rajesh Timane
Replacement Models in Operations Research with illustration on different types of problems or examples.
Replacement Problem
The efficiency of all industrial and military equipment's deteriorates with time. Sometimes the equipment fails completely and effects the whole system. The maintenance costs (running costs) of an equipment also go on increasing with time. Thus it becomes more economical to replace the old equipment with a new one. Hence there is a need to formulae a most economical replacement policy which is in the best interest of the system.
Replacement theory
The document discusses replacement theory in operations research. It describes individual and group replacement policies. For individual replacement, it provides an example of determining when to replace a machine based on comparing average total costs between years. For group replacement, it gives an example of determining the optimal time interval to replace all light bulbs based on failure rates and comparing total replacement costs. The optimal time was found to be every 3 weeks for the light bulbs.
Applied Operation Research (AOR) Replacement Theory
This presentation is all about the basic concept of Replacement Theory in Applied Operations Research (AOR) .
Principles of Management
The document discusses the principles of management. It defines principles as fundamental guidelines for management decision making derived from experience. It outlines several nature and characteristics of principles, including their universal applicability, flexibility, and contingency on situations. The significance of principles is that they provide insights for managers, optimize resource use, lead to scientific decisions, help adapt to changes, and fulfill social responsibility. Several classic principles are explained, including Fayol's and scientific management principles. Scientific management principles emphasize finding the best way to perform jobs scientifically rather than relying on rules of thumb.
QUEUING THEORY
This document provides an overview of queuing theory, which is used to model waiting lines. It discusses key concepts like arrival processes, service systems, queuing models and their characteristics. Some examples where queuing theory is applied include telecommunications, traffic control, and manufacturing layout. Common elements of queuing systems are customers, servers and queues. The document also presents examples of single and multiple channel queuing models.
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Replacement theory
The document discusses replacement theory, which determines the optimal time to replace equipment or machines that deteriorate over time. It increases maintenance costs as equipment ages. The document provides examples of industries that use replacement theory and outlines the methodology. It presents a sample replacement problem looking at the purchase price, annual running costs, and resale values to determine the year when replacement is most economical based on minimum average total cost. The optimal replacement period is calculated based on rules comparing maintenance costs to average costs or scrap value.
Replacement model
This document discusses replacement theory and models for determining optimal replacement times for equipment and components. It covers different types of failure mechanisms including gradual, sudden, progressive, and retrogressive failure. Key factors in replacement decisions are purchase costs, salvage values, maintenance costs, and operating costs. Optimal replacement minimizes total average costs over the lifetime of the item. Group replacement policies can be more cost effective than individual policies for items that fail suddenly by replacing items in a group before failures occur.
Replacement Theory Models in Operations Research by Dr. Rajesh Timane
Replacement Models in Operations Research with illustration on different types of problems or examples.
Replacement Problem
The efficiency of all industrial and military equipment's deteriorates with time. Sometimes the equipment fails completely and effects the whole system. The maintenance costs (running costs) of an equipment also go on increasing with time. Thus it becomes more economical to replace the old equipment with a new one. Hence there is a need to formulae a most economical replacement policy which is in the best interest of the system.
Replacement theory
The document discusses replacement theory in operations research. It describes individual and group replacement policies. For individual replacement, it provides an example of determining when to replace a machine based on comparing average total costs between years. For group replacement, it gives an example of determining the optimal time interval to replace all light bulbs based on failure rates and comparing total replacement costs. The optimal time was found to be every 3 weeks for the light bulbs.
Applied Operation Research (AOR) Replacement Theory
This presentation is all about the basic concept of Replacement Theory in Applied Operations Research (AOR) .
Principles of Management
The document discusses the principles of management. It defines principles as fundamental guidelines for management decision making derived from experience. It outlines several nature and characteristics of principles, including their universal applicability, flexibility, and contingency on situations. The significance of principles is that they provide insights for managers, optimize resource use, lead to scientific decisions, help adapt to changes, and fulfill social responsibility. Several classic principles are explained, including Fayol's and scientific management principles. Scientific management principles emphasize finding the best way to perform jobs scientifically rather than relying on rules of thumb.
QUEUING THEORY
This document provides an overview of queuing theory, which is used to model waiting lines. It discusses key concepts like arrival processes, service systems, queuing models and their characteristics. Some examples where queuing theory is applied include telecommunications, traffic control, and manufacturing layout. Common elements of queuing systems are customers, servers and queues. The document also presents examples of single and multiple channel queuing models.
Operational research queuing theory
This document provides an introduction to queuing theory. It discusses how queues form due to an imbalance between customer arrivals and service capabilities. Common examples where queues occur include buses, movie theaters, and service stations. Key terms are defined, such as customers, service stations, waiting time, and queue length. The elements that make up a queuing system are described as the arrival pattern of customers, the service mechanism, the queue discipline for selecting the next customer, and the output of the queue. First-come, first-served is provided as a common queue discipline.
MG 6863 UNIT II MAKE OR BUY DECISION
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Assignment Problem
This is a special type of LPP in which the objective function is to find the optimum allocation of a number of tasks (jobs) to an equal number of facilities (persons). Here we make the assumption that each person can perform each job but with varying degree of efficiency. For example, a departmental head may have 4 persons available for assignment and 4 jobs to fill. Then his interest is to find the best assignment which will be in the best interest of the department.
Transportation Problem
The document discusses the transportation problem in operations research and linear programming. It can be summarized as:
1) The transportation problem aims to transport goods from multiple origins to multiple destinations in a way that minimizes total transportation costs, given supply and demand constraints.
2) It can be formulated as a linear programming problem to find the optimal amounts transported between each origin-destination pair to minimize costs.
3) Solution methods like the Northwest Corner Rule and Vogel's Approximation Method are presented to find initial basic feasible solutions for the transportation problem.
Service operations
The document discusses various strategies for scheduling operations in service industries. It describes three types of service operations: quasi-manufacturing, customer-as-participant, and customer-as-product. For quasi-manufacturing operations, the primary concern is having enough resources to meet hourly customer demand. Customer-as-participant services require accommodating customers and cooperation between operations and marketing. Customer-as-product services are performed directly on customers, often using a first-in, first-out approach. The document also outlines strategies for scheduling service operations, such as chasing demand, earliest deadline first, and rate-monotonic scheduling.
16793 theory of_cost
The price of the firm's output is not a determinant of the firm's cost functions. The cost functions are determined by factors of production like labor, capital, technology etc. and not by the price that the firm can charge for its output.
Transportation technique
This document discusses transportation techniques and methods for solving transportation problems. It defines a transportation problem as aiming to find the best way to fulfill demand at multiple destinations using supply from multiple origins. It outlines the key components of a transportation model including origins, capacities, destinations, demands, and shipping costs. Three common solution methods are described - the minimum cost method, northwest corner method, and Vogel's approximation method - along with examples of each step. The document also lists some applications of transportation models like scheduling airlines and identifying facility locations.
Transportation model
The transportation model is a linear programming model that aims to minimize transportation costs by determining the optimal way to transport goods from multiple origins to multiple destinations. It is subject to supply and demand constraints. Common applications include minimizing shipping costs between factories and warehouses. The optimal solution is found using methods like the northwest corner rule or Vogel's approximation method to get an initial feasible solution, then checking for optimality using the stepping stone method or modified distribution method.
Cost Concept
The document discusses cost concepts and their application. It defines different types of costs such as fixed costs, variable costs, opportunity costs, sunk costs, explicit costs, and implicit costs. It also discusses total cost, which is the sum of fixed and variable costs. The total cost equation and linear cost equation are presented. Examples are provided to illustrate calculating total production costs, break-even points, and profits using the total cost equation. Location selection for facilities is also discussed, with factors like proximity to markets and suppliers, labor availability, and costs being considered in a break-even analysis.
Transportation Problem in Operational Research
The document discusses the transportation problem and methods for finding its optimal solution. It begins by defining key terminology used in transportation models like feasible solution, basic feasible solution, and optimal solution. It then outlines the basic steps to obtain an initial basic feasible solution and subsequently improve it to reach the optimal solution. Three common methods for obtaining the initial solution are described: the Northwest Corner Method, Least Cost Entry Method, and Vogel's Approximation Method. The document also addresses how to solve unbalanced transportation problems and provides examples applying the methods.
Assignment problems
1) The document discusses the Hungarian method for solving assignment problems. It involves minimizing the total cost or maximizing the total profit of assigning resources like employees or machines to activities like jobs.
2) The method includes steps like developing a cost matrix, finding the opportunity cost table, making assignments to zeros in the table, and revising the table until an optimal solution is reached.
3) There are examples showing the application of these steps to problems with unique and multiple optimal solutions, as well as an unbalanced problem with more resources than activities.
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Queuing theory
This document discusses key concepts in queuing theory. It defines queuing theory as applying to situations where arrival and service rates are unpredictable. Queuing theory aims to determine the optimal level of service that minimizes the costs of offering service and customer wait times. The document outlines components of a queuing system including the calling population, queuing process, queue discipline, and service process. It provides examples of different queue disciplines and discusses concepts like arrival patterns, inter-arrival times, finite vs infinite sources, and balking.
What is Replacement Theory.pptx
Replacement theory deals with replacing assets that deteriorate over time in order to minimize costs and maximize efficiency. It involves determining the optimal time to replace an item based on factors like maintenance costs, repair costs, and residual value. The goal is to balance the costs of maintaining an item against replacing it to maximize its value. There are different replacement models like time-based, condition-based, and opportunity-based models.
Managerial Economics Cost PPT
1. The document discusses various cost concepts including opportunity cost, outlay cost, total cost, average cost, marginal cost, fixed cost, and variable cost. It explains these concepts for both the short run and long run.
2. In the short run, total cost is the sum of total fixed cost and total variable cost. Average cost and marginal cost are calculated based on changes in total cost and output.
3. In the long run, all inputs are variable and firms can change the size of their plant and operations. Long run average cost is determined by the minimum points of a series of short run average cost curves.
Simulation in Operation Research
this ppt is helpful for BBA/B.tech//MBA/M.tech students.
the ppt is on simulation topic...its covers -
Meaning
Advantages & Disadvantages
Uses
Process
Monte Carlo SImulation
Advantages & Disadvantages
Its example
Cost analysis & Break even analysis
Meaning of Cost Analysis
Basic Cost Concept
Basic concept of financial Accounting/ Accounting Rules-Problems
Depreciation
Methods of Depreciation -Problems
Break Even Analysis
Marginal Uses of BEA
Transportation problems
The transportation problem is a special type of linear programming problem where the objective is to minimize the cost of distributing a product from a number of sources or origins to a number of destinations.
Because of its special structure, the usual simplex method is not suitable for solving transportation problems. These problems require a special method of solution.
Industrial Engineering
Industrial Engineering is concerned with designing integrated systems involving people, materials, equipment and energy. Some significant events in its development include the division of labor, standardized parts, scientific management, the assembly line, and quality control methods. Productivity is a measure of output over input, with higher productivity indicating more output is generated from the same level of inputs. Factors like technology, capacity utilization, and training can affect productivity levels in an organization.
North West Corner Method
This document presents information about the transportation problem and the North West Corner Method for solving it. It includes an introduction to transportation problems, definitions of key concepts, examples of applications, and steps for solving balanced and unbalanced problems using the North West Corner Method. It also provides an example problem from a medical supply company shipping catheters from production facilities to warehouses.
Replacement theory
This document discusses replacement theory and models for determining optimal replacement policies. It introduces replacement theory and explains that items must be replaced when they become obsolete, unusable due to failure, or inefficient due to deterioration over time. It presents four models of replacement: (1) aging of machines that deteriorate over time, (2) availability of new machines that are better, (3) considering the time value of money in depreciation calculations, and (4) group replacements of items that completely fail after a certain usage amount. An example of replacing light bulbs individually or through group replacement is also provided.
Replacement Theory
This document discusses replacement theory and models for determining when to replace products or services. It examines factors like maintenance costs increasing over time, probabilities of failure, and costs of failure or disruption. Common replacement scenarios explored include replacing when maintenance costs exceed replacement costs, replacing after a set number of failures, or periodically over time. The general approach is to analyze failure and performance patterns over time and assess costs and probabilities to determine the optimal replacement strategy.
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Operational research queuing theory
This document provides an introduction to queuing theory. It discusses how queues form due to an imbalance between customer arrivals and service capabilities. Common examples where queues occur include buses, movie theaters, and service stations. Key terms are defined, such as customers, service stations, waiting time, and queue length. The elements that make up a queuing system are described as the arrival pattern of customers, the service mechanism, the queue discipline for selecting the next customer, and the output of the queue. First-come, first-served is provided as a common queue discipline.
MG 6863 UNIT II MAKE OR BUY DECISION
Dr. A. Asha
Department of Mechanical Engineering
Kamaraj College of engineering & Technology, Virudhunagar
Assignment Problem
This is a special type of LPP in which the objective function is to find the optimum allocation of a number of tasks (jobs) to an equal number of facilities (persons). Here we make the assumption that each person can perform each job but with varying degree of efficiency. For example, a departmental head may have 4 persons available for assignment and 4 jobs to fill. Then his interest is to find the best assignment which will be in the best interest of the department.
Transportation Problem
The document discusses the transportation problem in operations research and linear programming. It can be summarized as:
1) The transportation problem aims to transport goods from multiple origins to multiple destinations in a way that minimizes total transportation costs, given supply and demand constraints.
2) It can be formulated as a linear programming problem to find the optimal amounts transported between each origin-destination pair to minimize costs.
3) Solution methods like the Northwest Corner Rule and Vogel's Approximation Method are presented to find initial basic feasible solutions for the transportation problem.
Service operations
The document discusses various strategies for scheduling operations in service industries. It describes three types of service operations: quasi-manufacturing, customer-as-participant, and customer-as-product. For quasi-manufacturing operations, the primary concern is having enough resources to meet hourly customer demand. Customer-as-participant services require accommodating customers and cooperation between operations and marketing. Customer-as-product services are performed directly on customers, often using a first-in, first-out approach. The document also outlines strategies for scheduling service operations, such as chasing demand, earliest deadline first, and rate-monotonic scheduling.
16793 theory of_cost
The price of the firm's output is not a determinant of the firm's cost functions. The cost functions are determined by factors of production like labor, capital, technology etc. and not by the price that the firm can charge for its output.
Transportation technique
This document discusses transportation techniques and methods for solving transportation problems. It defines a transportation problem as aiming to find the best way to fulfill demand at multiple destinations using supply from multiple origins. It outlines the key components of a transportation model including origins, capacities, destinations, demands, and shipping costs. Three common solution methods are described - the minimum cost method, northwest corner method, and Vogel's approximation method - along with examples of each step. The document also lists some applications of transportation models like scheduling airlines and identifying facility locations.
Transportation model
The transportation model is a linear programming model that aims to minimize transportation costs by determining the optimal way to transport goods from multiple origins to multiple destinations. It is subject to supply and demand constraints. Common applications include minimizing shipping costs between factories and warehouses. The optimal solution is found using methods like the northwest corner rule or Vogel's approximation method to get an initial feasible solution, then checking for optimality using the stepping stone method or modified distribution method.
Cost Concept
The document discusses cost concepts and their application. It defines different types of costs such as fixed costs, variable costs, opportunity costs, sunk costs, explicit costs, and implicit costs. It also discusses total cost, which is the sum of fixed and variable costs. The total cost equation and linear cost equation are presented. Examples are provided to illustrate calculating total production costs, break-even points, and profits using the total cost equation. Location selection for facilities is also discussed, with factors like proximity to markets and suppliers, labor availability, and costs being considered in a break-even analysis.
Transportation Problem in Operational Research
The document discusses the transportation problem and methods for finding its optimal solution. It begins by defining key terminology used in transportation models like feasible solution, basic feasible solution, and optimal solution. It then outlines the basic steps to obtain an initial basic feasible solution and subsequently improve it to reach the optimal solution. Three common methods for obtaining the initial solution are described: the Northwest Corner Method, Least Cost Entry Method, and Vogel's Approximation Method. The document also addresses how to solve unbalanced transportation problems and provides examples applying the methods.
Assignment problems
1) The document discusses the Hungarian method for solving assignment problems. It involves minimizing the total cost or maximizing the total profit of assigning resources like employees or machines to activities like jobs.
2) The method includes steps like developing a cost matrix, finding the opportunity cost table, making assignments to zeros in the table, and revising the table until an optimal solution is reached.
3) There are examples showing the application of these steps to problems with unique and multiple optimal solutions, as well as an unbalanced problem with more resources than activities.
Presentation on CVP Analysis, Break Even Point & Applications of Marginal Cos...
CVP analysis helps managers understand the relationship between cost, volume, and profit by examining how price, volume, variable costs, fixed costs, and product mix interact. It is used to determine what products to make/sell, pricing policies, marketing strategies, and facility investments. The break-even point is where total costs and revenues are equal, and no profit or loss has occurred. Marginal costing is used to set optimal prices, evaluate price reductions, choose product mixes, calculate safety margins, and set different prices for different customers.
Queuing theory
This document discusses key concepts in queuing theory. It defines queuing theory as applying to situations where arrival and service rates are unpredictable. Queuing theory aims to determine the optimal level of service that minimizes the costs of offering service and customer wait times. The document outlines components of a queuing system including the calling population, queuing process, queue discipline, and service process. It provides examples of different queue disciplines and discusses concepts like arrival patterns, inter-arrival times, finite vs infinite sources, and balking.
What is Replacement Theory.pptx
Replacement theory deals with replacing assets that deteriorate over time in order to minimize costs and maximize efficiency. It involves determining the optimal time to replace an item based on factors like maintenance costs, repair costs, and residual value. The goal is to balance the costs of maintaining an item against replacing it to maximize its value. There are different replacement models like time-based, condition-based, and opportunity-based models.
Managerial Economics Cost PPT
1. The document discusses various cost concepts including opportunity cost, outlay cost, total cost, average cost, marginal cost, fixed cost, and variable cost. It explains these concepts for both the short run and long run.
2. In the short run, total cost is the sum of total fixed cost and total variable cost. Average cost and marginal cost are calculated based on changes in total cost and output.
3. In the long run, all inputs are variable and firms can change the size of their plant and operations. Long run average cost is determined by the minimum points of a series of short run average cost curves.
Simulation in Operation Research
this ppt is helpful for BBA/B.tech//MBA/M.tech students.
the ppt is on simulation topic...its covers -
Meaning
Advantages & Disadvantages
Uses
Process
Monte Carlo SImulation
Advantages & Disadvantages
Its example
Cost analysis & Break even analysis
Meaning of Cost Analysis
Basic Cost Concept
Basic concept of financial Accounting/ Accounting Rules-Problems
Depreciation
Methods of Depreciation -Problems
Break Even Analysis
Marginal Uses of BEA
Transportation problems
The transportation problem is a special type of linear programming problem where the objective is to minimize the cost of distributing a product from a number of sources or origins to a number of destinations.
Because of its special structure, the usual simplex method is not suitable for solving transportation problems. These problems require a special method of solution.
Industrial Engineering
Industrial Engineering is concerned with designing integrated systems involving people, materials, equipment and energy. Some significant events in its development include the division of labor, standardized parts, scientific management, the assembly line, and quality control methods. Productivity is a measure of output over input, with higher productivity indicating more output is generated from the same level of inputs. Factors like technology, capacity utilization, and training can affect productivity levels in an organization.
North West Corner Method
This document presents information about the transportation problem and the North West Corner Method for solving it. It includes an introduction to transportation problems, definitions of key concepts, examples of applications, and steps for solving balanced and unbalanced problems using the North West Corner Method. It also provides an example problem from a medical supply company shipping catheters from production facilities to warehouses.
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This document discusses replacement theory and models for determining optimal replacement policies. It introduces replacement theory and explains that items must be replaced when they become obsolete, unusable due to failure, or inefficient due to deterioration over time. It presents four models of replacement: (1) aging of machines that deteriorate over time, (2) availability of new machines that are better, (3) considering the time value of money in depreciation calculations, and (4) group replacements of items that completely fail after a certain usage amount. An example of replacing light bulbs individually or through group replacement is also provided.
Replacement Theory
This document discusses replacement theory and models for determining when to replace products or services. It examines factors like maintenance costs increasing over time, probabilities of failure, and costs of failure or disruption. Common replacement scenarios explored include replacing when maintenance costs exceed replacement costs, replacing after a set number of failures, or periodically over time. The general approach is to analyze failure and performance patterns over time and assess costs and probabilities to determine the optimal replacement strategy.
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The document discusses replacement theory and models for determining the optimal time to replace equipment. It describes two types of equipment failure: gradual and sudden. Gradual failure leads to increased costs and decreased productivity over time. The models provided calculate the average total cost per year to determine the year when replacement yields the lowest costs. Discounted cash flows are considered for items with changing money value over time. The example provided compares two machines and determines that Machine A should be purchased as it has a lower total present worth cost over 6 years.
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The efficiency of all industrial and military equipments deteriorates with time. Sometimes the equipment fails completely and effects the whole system. The maintenance costs (running costs) of an equipment also go on increasing with time. Thus it becomes more economical to replace the old equipment with a new one. Hence there is a need to formulae a most economical replacement policy which is in the best interest of the system.
Replacement theory
This document discusses replacement theory and provides examples of its application. It addresses three types of replacement situations: 1) Items that deteriorate over time through use, like vehicles, increasing maintenance costs, 2) Items that fail suddenly without warning, like light bulbs, and 3) Replacement of staff in an organization due to retirement, death, or other reasons. The key aspects of replacement theory are determining the optimal time to replace an item or staff to balance increasing costs from deterioration or failure with the costs of replacement.
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The document discusses replacement theory and replacement models. It provides definitions and examples of different replacement models including: 1) Models where efficiency decreases with age and maintenance costs increase over time, 2) Models for items that fail suddenly, and 3) Models that consider replacement of human capital. Examples are provided to illustrate calculating optimal replacement times by comparing total costs. Key factors in replacement decisions include initial costs, maintenance costs over time, salvage values, and interest rates.
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What is replacement theory
Replacement theory is used to decide when to replace used equipment with new, improved equipment. It considers factors like equipment deterioration over time, failures, technological advancements, and increased demand. There are several replacement models that take different factors into account, such as how equipment ages and becomes outdated, the availability of newer machines with better usage, the depreciation of equipment value over time, and replacing groups of items that fail completely after use. Replacement theory helps determine the optimal time to replace equipment to minimize costs and maximize benefits.
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For the first problem involving two machines, the optimal sequence is job 2, 1, 6, 5, 4, 3 with a total elapsed time of 85 hours.
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JIMS Rohini News - Jagan Institute of Management Studies, Rohini, Delhi is organizing International Conference (ICAMP 2017 ) “Confronting the VUCA World: Strategies for Growth and Excellence” on Saturday, February 11, 2017 at JIMS Rohini
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We are enclosing herewith the conference brochure for your ready reference.
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https://www.jimsindia.org/icamp2017/
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Replacement theory
- 2. Meaning Equipments and machines used in industries and in military deteriorate with time, as a result of which their efficiency decreases and in turn increases their maintenance cost. Hence, there arises a need to formulate a replacement policy which would enable us in deciding the age at which the replacement of the old equipment by new one is most economical than continuation of old equipment at an increased maintenance cost.
- 3. Need for Replacement Theory The item that has become inefficient with passage of Time. The item requires more cost for its maintenance as age increases. The item doesn't deteriorate with time but suddenly fails. A better/ more efficient design of machine/ equipment has become available in the market.
- 4. Notations used C/P – (Capital) Cost of Equipment. S – Scrap (or Resale) Value. Ci – Running (or Maintenance) Cost. Σci – Cumulative Running Cost. (C-S) – Depreciation. T(n) – Total Cost. A(n) – Average Total Cost
- 5. Example A transport company purchased a motor vehicle for rupees 80000/-. The resale value of the vehicle keeps on decreasing from Rs 70000/- in the first year to Rs 5000/- in the eighth year while, the running cost in maintaining the vehicle keeps on increasing with Rs. 3000/- in the first year till it goes to Rs. 20000/- in the eighth year as shown in the below table. Determine the optimum replacement policy?
- 6. Example Year 1 2 3 4 5 6 7 8 Scrap value 70000 61000 55000 49000 32000 20000 10000 500 0 Runni ng cost 3000 3600 4800 5000 8000 11200 15000 200 00
- 7. C = 90000 YEAR C S Rn Σ Rn (C-S) TC ATC [Σ Rn + (C-S)] [TC / YEAR] 1 90000 70000 3000 3000 20000 23000 23000.00 2 90000 61000 3600 6600 29000 35600 17800.00 3 90000 55000 4800 11400 35000 46400 15466.67 4 90000 49000 5000 16400 41000 57400 14350.00 5 90000 32000 8000 24400 58000 82400 16480.00 6 90000 20000 11200 35600 70000 105600 17600.00 7 90000 10000 15000 50600 80000 130600 18657.14 8 90000 5000 20000 70600 85000 155600 19450.00