COMPUTER TELLS CONTRACTORS WHEN TO BUY

A COMPUTER PROGRAM HAS BEEN DEVELOPED USING A MATHEMATICAL MODEL WHICH INCLUDES THE MANY VARIABLES AND CONSIDERATIONS INVOLVED IN EQUIPMENT BUYING. THE COMPUTER GIVES THE CONTRACTOR A SERIES OF GRAPHS THAT CLEARLY SHOW THE RELATIONSHIPS BETWEEN THE VARIABLES AND THE EXACT EFFECT OF VARIOUS ALTERNATIVES. THE PROFITS GENERATED BY THE OPERATION OF A MACHINE AND ITS REPLACEMENTS ARE QUANTIFIED BY WRITING EQUATIONS TO EXPRESS EACH REVENUE OR COST CURVE. INFLATION IS TAKEN INTO ACCOUNT BY DISCOUNTING DOLLARS BACK TO THE PRESENT TIME. COSTS ARE SUBTRACTED FROM REVENUES TO OBTAIN THE PRESENT WORTH OF PROFITS AFTER TAXES. VARIABLES ARE EXAMINED AND EQUATIONS WRITTEN FOR FACTORS SUCH AS REVENUE FROM A MACHINE, MAINTENANCE AND OPERATING COST, CAPITAL COSTS, DEPRECIATION, INFLATION, INTEREST CHARGES OR EQUIPMENT LOANS AND OVERHAUL COSTS. AFTER STUDYING MATHEMATICAL MODELS OF EQUIPMENT ECONOMICS, TWO CONCLUSIONS MAY BE DRAWN: /1/ THE ECONOMIC LIFE OF A PIECE OF EQUIPMENT IS MUCH SHORTER THAN THE LIFE OVER WHICH A PROFIT CAN BE MADE ON ITS OPERATION AND /2/ THE FLEXIBILITY OF THE MODEL LENDS IT TO READY ANALYSIS OF ALTERNATIVE.

  • Supplemental Notes:
    • Vol 33, No 9, PP 28-29, 2 FIG
  • Authors:
    • DOUGLAS, J
  • Publication Date: 1967-9

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  • Accession Number: 00214773
  • Record Type: Publication
  • Files: TRIS
  • Created Date: May 6 1994 12:00AM