3.3 - Optmising a Renewal Frequency Flashcards
How is the lower average annual cost formula?
Total life cost / total year of useful life
What if the optimal decision?
It is the one that results in the lowest lifecycle costs to provide the required level of service for the duration of time the service is required
What information flows, from the asset Management Conceptual Model, can assist us in creating our whole-life cost template?
-Policy & Strategic Planning: clear path on how to construct our costs and build the model
-Organizational Structure & Culture: supporting the collection and analysis of these costs
-Asset Knowledge & Data: we need to state what information we have used about the asset and list our assumptions
-Asset Maintenance: understand maintenance intervals and costs attached. We also need to know how assets behaves and deteriorates over time.
-Risk Assessment & Management: understand the organization’s appetite for risk and what risk cost need to be included in our whole life cost
What is sensitivity testing used for?
To help us understand how significantly any of the information we put into the module affects the answer
What is the definition of the optimal economic life of an asset?
The life that leads to the lowest life cycle cost to provide the required service for the duration of time to services required
Why would asset condition affects the whole life cycle cost?
As the asset condition deteriorates the risk/costs of failure increases
Which statement describes the optimal life (or renewal frequency) of an asset?
The renewal frequency where the sum of the average annual cost, for the asset is lowest
What is sensitivity testing?
 Sensitivity, testing help us understand how significantly any of the information we put into a model affects the answer
