Question

Managers should base equipment replacement decisions on _____________ analysis rather than physical deterioration.

Answer 1

Managers should base equipment replacement decisions on economic analysis, focusing on the total cost of ownership and sustainability, rather than just on physical deterioration of the equipment.

Step-by-step explanation:

Managers should base equipment replacement decisions on economic analysis rather than physical deterioration. This approach to management underscores the importance of considering the total cost of ownership, which includes the purchase price, maintenance, operation, and potential resale value, as well as the environmental impact of disposal and manufacturing. When making decisions about replacing equipment, the focus shifts from just the observable wear and tear to the broader financial implications and the sustainability of the equipment's life cycle.

In a scenario where labor costs decrease and the expenses associated with disposal and acquisition of new equipment increase, the economic landscape changes in favor of repairing and maintaining existing equipment. Under such a paradigm, the durability of goods, the value of craftsmanship, and the availability of high-quality goods take precedence over the short-term, disposable economy. The societal move towards sustainable practices encourages designs that facilitate upgrades and repairs, promoting longer-lasting, repairable products with lifetime warranties to counteract planned obsolescence.

Answer 2

Managers ought to make equipment replacement choices based on economic analysis, highlighting the importance of sustainability, repair costs, and environmental factors rather than just the physical condition.

Step-by-step explanation:

Managers should base equipment replacement decisions on economic analysis rather than physical deterioration. The decision process should involve considering the environmental costs of manufacturing new units against repairing existing ones, factoring in repair costs which may become cheaper relative to replacement. With changing economic conditions, there may be a shift towards valuing craftsmanship, high-quality goods, and sustainable practices such as lifetime warranties and designs that facilitate upgrades or repairs. This shift also aligns with the static nature of human visual acuity and the relative perfection of modern displays, suggesting that replacing small failed components can be a more cost-effective and environmentally friendly approach.

In equipment replacement decisions, managers should base their choices on economic analysis rather than physical deterioration. This means considering the costs and benefits associated with repairing or replacing the equipment.

For example, if the cost of repairing a piece of equipment is higher than the cost of purchasing a new one, it may be more economical to replace it. On the other hand, if the repair cost is lower and the equipment still has significant usable life left, it may be better to repair it.

By conducting an economic analysis, managers can make informed decisions that optimize the use of resources and minimize costs.