A guideline for making equipment replacement decisions

Abstract

At the present time, only a small portion of Canadian forest companies have a standardized, written replacement policy that is based on economic theory. By not replacing their equipment at the optimum time, these companies are loosing money. Two replacement models, the FERIC Complex model and the Stewart model, were analysed and compared using data for a fleet of Koehring feller forwarders. The Stewart model was found to be a more useful tool for assisting equipment managers in making equipment replacement decisions. Guidelines to assist equipment managers in performing replacement analysis are suggested and recommendations are made for more research into this area. Key words : replacement policy, FERIC Complex model, Stewart model.