Grant, (2017), simplifies the diagram. He states that the results can be fetched from the last column. The pattern of the movement is derived from the average total cost (ATC). At first the cost starts dipping from US$ 13000 till it reaches US$11850 in the cell H8. From H9 it again starts increasing. This cost at which the ATC is lowest in a particular year (after which it starts increasing again) gives the optimum replacement period and cost of the vehicle and thus H5.
The Replacement Theory in Operations Research is relevant to this study because it will help the researcher and ZIMRA to recognize the point where the vehicle should be removed in the organisational system as stated above that where ATC is at its lowest as calculations of the coming year will be higher and it becomes an unnecessary cost to the organisation.
2.2.3 …show more content…
If repair exceeds 50% of a particular threshold, the rule says you should opt to replace. But, if a repair can be completed for less than 50% of the baseline, then you should choose to fix. So, the inequality favoring repair:
Repair Cost < Replacement Threshold × 50%
Variables of 50% Model (Repair or replace)
M-salvage = market value of the broken machine (also known as the …show more content…
The key factor in the above statement is that vehicle maintenance is an important element in vehicle management despite the fact that it is private or public institution. Similarly, Revenue Authorities need to maintain their fleets so that they improve status of their vehicles so that users would like to use
The Replacement Theory in Operations Research is relevant to this study because it will help the researcher and ZIMRA to recognize the point where the vehicle should be removed in the organisational system as stated above that where ATC is at its lowest as calculations of the coming year will be higher and it becomes an unnecessary cost to the organisation.
2.2.3 …show more content…
If repair exceeds 50% of a particular threshold, the rule says you should opt to replace. But, if a repair can be completed for less than 50% of the baseline, then you should choose to fix. So, the inequality favoring repair:
Repair Cost < Replacement Threshold × 50%
Variables of 50% Model (Repair or replace)
M-salvage = market value of the broken machine (also known as the …show more content…
The key factor in the above statement is that vehicle maintenance is an important element in vehicle management despite the fact that it is private or public institution. Similarly, Revenue Authorities need to maintain their fleets so that they improve status of their vehicles so that users would like to use