Equipment replacement decision making in the mining industry

Cohen, Gavin (2001-03)

Thesis (MBA)--Stellenbosch University, 2001.

Some digitised pages may appear illegible due to the condition of the original hard copy


ENGLISH ABSTRACT: The decision to make equipment replacements has a major influence on the competitiveness of any business. A company like Iscor recently spent approximately one billion Rand to modernise its fleet of equipment at various centres. This report presents a holistic approach to the issue of equipment replacement decision-making. It contends that equipment replacement decisions are not isolated incidents that occur by chance. In fact, the whole process is an integral part of the various processes in the business. This ranges from the influence on the strategy, through to issues such as production planning, maintenance, staffing, financial planning and so on. The role of the replacement decision in each of these elements are discussed and elaborated on. The report goes on to review the various models available in the industry and discusses their advantages and disadvantages. Thus ensuring a clear understanding of the differences in the approaches. The report attempted to propose a method that is relatively straight forward and in terms of application lends itself to the practical mining man. The proposed models are then used to complete a relatively simple example. The example was primarily aimed at showing the elements of the application and certainly not the full extent of the model.

AFRIKAANSE OPSOMMING: Die uitvoer van toerusting vervanging_sbesluite kan 'n dramatiese invloed op die mededingendheid van enige besigheid hê. 'n Maatskappy soos Iscor het onlangs 'n bedrag van ongeveer een biljoen Rand gespandeer om hul vloot van toerusting op verskeie sentrums te vervang. Die verslag stel 'n alles omvattende benadering tot die kwessie van toerusting vervangingsbesluitneming voor. Die verslag gaan voort om voor te stel dat die vervangingsbesluit nie iets is wat toevallig geneem moet word nie. Inteendeel dit is 'n integrale deel van al die verskeidenheid besigheidsprosesse. Die verslag bespreek die verskeidenheid modelle beskikbaar en brei uit oor die voor - en- nadele van elk. Die bespreking verseker dat die leser 'n duidelike beeld kry oor die toepaslikheid van die verskeie modelle. Dit gaan voort om 'n praktiese model voor te stel wat redelik maklik is om aan te wend. Die model word dan toegepas op 'n eenvoudige voorbeeld.

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