Cost Associates Mantinence


Replacement model is the part of operation research mostly used in the industries when a purchased items like machinery, buildings efficiency is reduced or wear out due to much usage.

Costs Associated with Maintenance

Our main aim in this chapter is to find optimal replacement period so as to minimize the maintenance cost. Hence we are very much interested in the various cost associated with maintenance. Various costs to be discussed are:


Purchase cost or Capital cost: ( C )


Salvage value / Scrap value / Resale value / Depreciation: (S)


 Running costs including maintenance, Repair and Operating costs:

  •         This cost is independent of the age of the machine or usage of the machine. This is incurred at the beginning of the life of the machine, i.e. at the time of purchasing the machine or equipment.
  •         But the interest on the invested money is an important factor to be considered.
  •         As the age of the machine increases, the resale value decreases as its operating efficiency decreases and the maintenance costs increases.
  •       It depends on the operating conditions of the machine and life of the machine.
  •         These costs are the functions of age of the machine and usage of the machine.
  •        As the usage increases or the age increases, due to wear and tear, many components fail to work and they are to be replaced. As the age increases, failures also increase and the maintenance costs goes on increasing.
  •       At some period the maintenance costs are so high, which will indicate that the replacement of the machine or equipment is essential.