Case Study: Model for Economic Lifetime of Drilling Machines in the Swedish Mining Industry

Hussan Al-Chalabi, Jan Lundberg, Alireza Ahmadi and Adam Jonsson

The Engineering Economist, 2015, vol. 60, issue 2, 138-154

Abstract: The purpose of this article is to develop a practical economic replacement decision model to identify the economic lifetime of a mining drilling machine. A data-driven optimization model was developed for operating and maintenance costs, purchase price, and machine resale value. Equivalent present value of these costs by using discount rate was considered. The proposed model shows that the absolute optimal replacement time (ORT) of a drilling machine used in one underground mine in Sweden is 115 months. Sensitivity and regression analysis show that the maintenance cost has the largest impact on the ORT of this machine. The proposed decision-making model is applicable and useful and can be implemented within the mining industry.

Date: 2015
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DOI: 10.1080/0013791X.2014.952466

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