Think about this:
"A piece of equipment that is being considered as a replacement for an existing item has greater reliability; that is, the Mean Time Between Failure (MTBF) during the operation of the new equipment has been increased 40% in comparison with the present item. "
How it might be feasible in an engineering economic analysis to consider this situation in terms of the monetary?
New equipment is being consider as a replacement for an existing item, which is 40% more reliable than present item. Let us digest the situation.
Considering things and prospective outcomes is my first stand on this situation. Let us say that the present equipment is used for a years. Seems to be old, the systems are now being subjective to malfunctions, failures, and performances as well durability are downgrading. As a result, you will end up bringing the old equipment to technician. It will cost you more.
On the other hand, considering new equipment as replacement with 40% reliability compare to the old equipment. Aside from it is new and more reliable, it can offer for the products being processed a quality improvement, expansion or new products and more likely add-up to the quantity being produce in a certain period.
The new equipment has more prospective outcome and profitable for me. Therefore, it might be more feasible to decide and go with it. It is more profitable, not subjected to failure because it is new and high rate of reliability. However, when it comes to present item or equipment, it is still functional and can offer service. We need to consider it too before arriving into conclusion.
The present equipment old but still functioning, whereas, if we directly buy the new equipment what will we going to do to the other equipment? We put money too; we invest in that equipment before. It could be a great loss in monetary budged. Likewise, as I have said, when it starts misbehaving and malfunctioning a more loss will be in line. In what case? Of course, for repairing, buying new parts if something broken, the produced product will be just see in quantity but poor in quality.
In conclusion, it is be more strategical and feasible to rely on new equipment than on current equipment used. For the reasons; it has new specs, longer lifespan, not subjected to failure and malfunction because it is new of course tested too with 40% reliability rate than old item, can produce massive quantity products directly proportional to good quality, and best way to invest money than for investing on repairing the old equipment.
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