Replacement DecisionsKeep or Replace Equipment Replacement Decisions Analysis Software

The Replacement Decision analysis software or Keep & Replace analysis software is used to make decisions related to keeping and maintaining existing equipment or facilities or replacing aging equipment with new equipment or facilities.

Replacement and upgrading decisions involve completing a “Keep Template” and a “Replace Template” and then using the incremental cash flow analysis report to decide whether to keep or replace or upgrade the equipment or facilities.

Replacement Decision Examples

  1. A hospital has an old X-Ray machine which breaks down on a regular basis. Should they replace the old equipment with a new, more productive X-Ray machine?
  2. A city is continually repairing an aging wooden bridge. Should they:
    a) Keep fixing the bridge?
    b) Replace with a new wooden bridge?
    c) Replace with a steel bridge?
  3. A manufacturing organization is considering replacing aging production equipment used to produce plastic bottles with a more technologically advanced model which will result in:
    • Less rejected products resulting in lower manufacturing costs per unit
    • The new computerized system allows faster set up and less down time
    • Increase in sales because of increased production capacity
    • Lower labor costs per unit

    Should they invest in the new equipment?

  4. A city is considering whether to replace the traditional parking meters with parking meter stations which requires a substantial investment but will generate additional revenue and reduce labor costs. Should they replace the parking meters with parking meter stations?

Sample Reports