When deciding whether to replace or retain a piece of equipment, please explain the following: What...

When deciding whether to replace or retain a piece of equipment, please explain the following:

What is the process to analyze the defender and challenger when there are multiple mutually exclusive alternatives?

Explain why an Organization would consider a replacement.

Explain why an Organization may retain the equipment even if the analysis indicates it is economically justifiable to replace.

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Expert Solution

What is the process to analyze the defender and challenger when there are multiple mutually exclusive alternatives?

The process to analyse the defender and the challenger while having the multiple mutually exclusive alternatives is done by analysing the cost effectivity and effieciency of the products. One best option is selected out of many options because of the fact that which one is the most feasible and also profitable for the company. If the company finds out that doing more expenses of the existing equipemnt is costlier than replacing it with a better one, then the replacement decision is considered. Otherwise, the usage of existing equipment is taken out.

2. An organisation would consider the replacement of the equipment instead of retaining the same because of the cost benefits of the equipment. If the retaining of the equipment would become more costlier than replacing the one. If the profits are increasing and costs are decreasing by the replacement of the equipment, then the replacement option is considered.

3. An organisation would prefer to retain the equipment even is the analysis is indicating that it is economically justifible for it to replace would be the difficulty and the time analysis of finding and replacing the equipment with a better one. Sometimes because of the costs that we have spent on having an equipment is not depriciated and thus we wouldn't replace to fulfilt the depriciating time of the one we are already having. Also the time and difficulty to find a one is also saved.

keosha answered 7 months ago

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