Mastergp
Verified member
No equipment remains as it is forever. There is always a life span for every equipment and for the fact that production must continue as long as the organization is in existence, this call for proper planning of the replacement of the equipment against it unproductive old age.
Equally important is the fact that some machines without getting to their old age may suffer from obsolescence due to technological innovations and improvement and therefore adequate preparation should be made to replace them with new and more efficient one.
This replacement should not be done anyhow. It recognize the cost implications and use the option that reduces cost. When a firm has decided to buy a new machine, there must be a running policy concerning what should be traded in, sold as scrap or even be kept as standby for necessity cases.
However, if the company has made up its mind to procure new equipment,the following conditions have to be fulfilled: initial cost,operating expenses,trade in allowances, service quality,shipment dates of the manufacturer etc.
The machine selected should also minimize cost and consider the following cost aspect of the evaluations which are the initial cost of the equipment, operating cost be whether direct or indirect and finally capital on invested fund.
Equally important is the fact that some machines without getting to their old age may suffer from obsolescence due to technological innovations and improvement and therefore adequate preparation should be made to replace them with new and more efficient one.
This replacement should not be done anyhow. It recognize the cost implications and use the option that reduces cost. When a firm has decided to buy a new machine, there must be a running policy concerning what should be traded in, sold as scrap or even be kept as standby for necessity cases.
However, if the company has made up its mind to procure new equipment,the following conditions have to be fulfilled: initial cost,operating expenses,trade in allowances, service quality,shipment dates of the manufacturer etc.
The machine selected should also minimize cost and consider the following cost aspect of the evaluations which are the initial cost of the equipment, operating cost be whether direct or indirect and finally capital on invested fund.
