A Scoring Methodology for Equipment Replacement Model Evaluation

Abstract

A scoring model was developed and used to rate several analytical techniques used in making equipment replacement decisions. The model incorporates both subjective evaluations by users as well as objective performance measures on several actual replacement problems. Among the several models ranked, the payback criterion ranked highest, primarily because of the ease with which it is understood and implemented. Models incorporating present values, including profit maximization and risk analysis, ranked next, while the MAPI technique received the lowest ranking.