Question 1: What do you mean by replacement problem? Explain some important replacement situations.
Question 2: Describe different replacement problems.
Question 3: The cost of a machine is Rs 6,100 and its scrap value is only Rs 100. The maintenance costs are found from experience to be.
When should machine be replaced?
Question 4: The initial cost of an item is Rs 15,000 and maintenance or running costs (in Rs) for different years are given below
What is the replacement policy to be adopted if the capital is worth10 % and there is no salvage value?
Question 5: The given failure rates have been observed for a certain type of light bulbs
There are 1000 bulbs in use, and it costs Rs 2 to replace an individual bulb which has burnt out. If all bulbs were replaced simultaneously it would cost 50 paise per bulb. It is proposed to replace all bulbs at fixed intervals of time, whether or not they have burnt out, and to continue replacing burnt out bulbs as and when they fail. At what interval should all bulbs be replaced? At what group replacement price per bulb would a policy of strictly individual replacement become preferable to the adopted policy?