Practice Downtime Cost (8.2) - Equipment Life and Replacement Analysis (Part-1)

Practice: Downtime Cost

Lesson 8.2Equipment Life and Replacement Analysis (Part-1)

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10 questions

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6 sample questions

Question 1.
What is downtime cost?
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Think about the core reason machinery is non-operational.
Question 2.
What constitutes fixed ownership costs?
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Consider costs that occur during both operation and idle time.
3Question 3.
What is downtime cost?
- Costs incurred when machinery is operational
- Costs incurred when machinery is not working
- Costs incurred when machinery is purchased
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Focus on the times when the machine is unable to contribute to work.
4Question 4.
True or False: Fixed ownership costs are not incurred when machines are idle.
- True
- False
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Consider costs that are typically stable no matter the operation.
Question 5.
Consider a construction site with 3 machines where machine A is down for 15% of the project time, machine B for 20%, and machine C for 10%. If each machine has equivalent operating costs and downtime implications, how should costs be represented when calculating total downtime expenses?
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Factor in how these percentages interact to affect project efficiency.
Question 6.
A company operates two excavators. When one is repaired, productivity drops by 30%, thereby leading to increased operational costs. If operational costs are $250,000 annually, estimate the increase in expenses due to downtime based on the productivity loss.
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Reflect on how productivity directly affects financials during operation.

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