 THE REPLACEMENT-RENEWAL OF INDUSTRIAL EQUIPMENTS. THE MAPI FORMULASMella Piero (), Michela Pellicelli and Meo Colombo Carlotta () Annals of Faculty of Economics, 2010, vol. 1, issue 1, 667-680 Abstract: Since the production has been found to be an economical means for satisfying human wants, this process requires a complex industrial organization together with a large investment in equipments, plants and productive systems. These productive systems are employed to alter the physical environment and create consumer goods. As a result, they are consumed or become obsolete, inadequate, or otherwise candidates for replacement. When replacement is being considered, two assets must be evaluated: the present asset, the defender and its potential replacement, the challenger. Since the success of an industrial organization depends upon profit, replacement should generally occur if an economic advantage will result. Whatever the reason leading to the consideration of replacement, the analysis and decisions must be based upon estimates of what will occur in the future. In this paper we present the Mapi algorithm as a procedure for evaluating investments or for analyzing replacement opportunities. Keywords: replacement/renewal policy; Mapi formulas; adverse minimum; defender and challenger plant; operating inferiority; one-more year test (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ora:journl:v:1:y:2010:i:1:p:667-680 Access Statistics for this article More articles in Annals of Faculty of Economics from University of Oradea, Faculty of Economics Contact information at EDIRC. |
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