Annotation

Nowadays there is the task to determine the rational terms of the replacement of worn-out or outmoded manufacturing equipment with new ones. It is necessary to compare the costs of replacement (purchase of new equipment, dismantling of old one, installation of the new one) with the benefits of such replacement (reduction of loss of profit from non-fulfillment of orders due to downtime, maintenance, overconsumption of raw materials or energy resources). Market conditions also predetermine the consideration of dynamics of prices for new equipment.

The decision to replace the equipment is complex because the liquid value of the equipment and losses associated with its repair and maintenance depends on its age. For a certain period (duration of several years), a comprehensive decision to replace the equipment consists of intermediate solutions – every year there may be two alternatives: replace the equipment or continue to use it. Next year’s costs depend on which alternative was chosen in the previous year.

One calculates the amount of costs for the general period adding the costs of each year, which are determined for the following reasons:

a) if the equipment was not replaced in the relevant year, the amount includes only exploitation expenditures (they depend on the age of the equipment);

b) if the equipment is replaced in the relevant year, the amount together with exploitation expenditures of the current year includes the cost of purchasing new equipment without the liquid value (proceeds from the sale of used equipment).

In the article, one has proposed a mathematical model to describe the equipment replacement scheme and the corresponding algorithm, which comes down to the analysis of all possible options.

The developed mathematical model makes it possible to substantiate the rational terms of replacement of various types of the active part of manufacturing facilities in building companies if there is information about exploitation expenditures. The advantage of the proposed approach is the possibility to consider changes of not only exploitation expenditures but also the cost of old and new equipment in accordance with market prices over the years.