Lesson 2 - Replacement Models

Question 1

arises when any one of the components of
productive resources, such as machinery, building, and personnel,
deteriorates due to time or usage.

Answer 1

The problem of replacement

Question 2

The main objective of the replacement

Answer 2

is to help
organizations maximize their profit or minimize their cost.

Question 3

This occurs as the life of
the machine increases or
due to continuous usage

Answer 3

Gradual Failure

Question 4

In this case, the items ultimately fail after a period
of time.

Answer 4

Sudden failure

Question 5

The probability of failure
increases with the
increase in the life of an
item.

Answer 5

Progressive Failure

Question 6

Some items will have a higher
probability of failure in the beginning of
their life, and as time passes,
chances of failure become less.

Answer 6

Retrogressive failure

Question 7

A constant probability of failure is associated with items that fail from random causes.

Answer 7

Random failure

Question 8

Bathtub curve where Failures are more frequent in this stage, similar to how a baby needs time to adjust to
its new environment.

Answer 8

Infant Stage or Early failure stage

Question 9

Bathtub curve where Failures may occur due to operational errors, heavy load, or voltage fluctuations, but
these can be managed with repair and preventive maintenance.

Answer 9

Youth stage or Random failure stage

Question 10

Bathtub curve where frequent failures indicate that replacement of the machine or equipment may be
necessary.

Answer 10

Old Age stage or Wear out Failures

Question 11

This involves the process of replacing items such as machine tools,
transport, and other vehicles that experience a decrease in operating
efficiency due to aging or continuous usage.

Answer 11

Replacement of Capital Equipment

Question 12

involves replacing components such as electric bulbs, transistors,
and electronic components that fail suddenly and randomly.

Answer 12

Replacement of Items that fail completely

Question 13

This problem requires knowledge of life distribution for service of staff in
a system.

Answer 13

Replacement of Human beings in Organization (Staffing problem)

Question 14

This involves replacement of existing units due to the availability of more effective
and advanced technology.

Answer 14

Miscellaneous Problems

Question 15

Costs that depend on the item’s age or choice
are considered in replacement decisions.

Answer 15

Cost Consideration

Question 16

The key criterion in replacing items with deteriorating
efficiency

Answer 16

Efficiency Measurement

Question 17

As time and usage increase, maintenance costs
rise.

Answer 17

Maintenance Cost

Question 18

When replacing an item, various alternatives
are compared based on running and maintenance costs to select
the optimal choice.

Answer 18

Alternative Choices

Question 19

Techniques for Analysis

Answer 19

a) Replace items with increasing maintenance costs over time, with constant
money value.
(b) Replace items with increasing maintenance costs and changing money value over time.
(c) Use the concept of present value to compare alternative choices.

Question 20

It is the current value of future expenses or income.

Answer 20

Present Value (PV)

Question 21

Is a Single payment present worth factor. It
shows how much a future payment or expense is worth in today’s money.

Answer 21

Present Worth Factor (PWF)

Question 22

Helps in determining
how much needs to be saved or invested annually to reach a future
financial goal.

Answer 22

Uniform Annual Series Present Worth Factor (PWFS)

Question 23

This policy states that replace the item
soon after its failure. Here the cost of
replacement will be somewhat greater as the
item is to be purchased individually from the
seller as and when it fails. From the time of
failure to the replacement, the system
remains idle.

Answer 23

Individual Replacement Policy

Question 24

In this case, all the items, even if they are in good
working condition, are replaced at a stipulated
period as calculated by the organization by using..

Answer 24

Group Replacement Policy

Question 25

states that a large
population is subjected to a given mortality law for
a very long period of time.

Answer 25

Mortality Theorem