Significance of Replacement

The replacement of parts or entire machine will become significant and necessary in the following cases:

• When average cost of repairs or maintenance or operating goes higher than the costs of the machine or in other words, the cost of maintenance will increase to such an extent that the average annual repair or maintenance cost is greater than or equal to costs of new machine.
• Machine runs with less efficiency and therefore not economical.
• When the machine completely fails to work very frequently by which the production schedules are interrupted.
• If it is expected that the existing model may become obsolete or resale value may drastically come down.
• Modified or new designs in the market may give an edge of advantage such as reduced cost of production or ease and comfort of operation or more functions are available in new design, etc.
• If the item is non-repairable type or use and throw type.