Ee MCQ U Iv
Ee MCQ U Iv
Ee MCQ U Iv
A) Replace it now.
B) Replace it in 2 years.
C) Replace it in 3 years.
D) Replace it in 5 years.
18. A stamping machine currently has a salvage value of $10 000, and this will drop by 20% per year
from now on. Its expected maintenance costs are $1 000 for this year, but in the following year it is
expected to need a major overhaul, costing $3 500. In the year following the overhaul, its
maintenance costs will be $500, and these will then go up by 30% per year. Your MARR is 10%.
There is a challenger available that will do the same job for an EAC of $3 400. When should you
replace the old machine?
A) right now
D) the difference between the purchase price and the salvage value
20. What is the economic life of the following asset, given that its purchase price is $60 000 and the
MARR = 10% ?
23. If it is said that the economic life of a challenger is four years it means that
B) four years are required for the challenger to recover its initial investment.
C) four years are required for the challenger to recover its operating and maintenance costs.
A) annual cost of the initial investment in an asset spread over its economic life
B) average annual cost of owning and operating an asset over its economic life
D) the sum of the asset’s depreciation and its operating costs in any given year
A. are eliminated.
B. are reduced.
C. are less costly.
D. cannot happen.
A. proactive; cheaper
B. cheaper; reactive
C. reactive; proactive
D. cheaper; more productive
29. Companies usually find that minimizing the total cost of maintenance requires them to:
31. A group of workers being held responsible for maintaining, on an ongoing basis, the machines they
operate is referred to as total _________ maintenance.
A. Reactive
B. productive
C. preventative
D. proactive
33. Which of the following would not typically be a consideration in the equipment replacement
question?
A. forecasts of future demand
B. expertise workers had on the old equipment
C. the cost of the replacement equipment
D. the cost to maintain the old equipment
35. Which type of maintenance is not directly included in the total maintenance cost, but might be a
component of total overall cost?
A. Preventive
B. Breakdown
C. Predictive
D. Prescriptive
36. The group replacement policy is suitable for identical low cost items which are likely to
(A) fail over a period of time
(B) fail suddenly
(C) fail completely
(D) none of the above
38. The production manager will not recommend group replacement policy
(a)When large numbers of identical items are to be replaced
(b)In case Low cost items are to be replaced, where record keeping is a problem
(c)For items that fail completely
(d)For Repairable items
40. What is concerned with the prediction of replacement costs and determination of the most
economic replacement policy ?
a) Search Theory
b) Theory of replacement
c) Probabilistic Programming
d) None of the above
a) Corrective maintenance
b) Timely maintenance
c) Scheduled maintenance
d) Preventive maintenance
43. Continually monitoring performance for signs of need of maintenance is known as:
a) Preventive maintenance (PM)
b) Run to breakdown (RTB)
c) Condition-based maintenance (CBM)
d) All of the above
44. If a batch of 200 electronic components is tested for 400 hours and 5 fail during the test, what is
the failure rate as a percentage?
a) 2.5%
b) 1.25%
c) 5%
d) 10%
48. ______________has two components. (i) Initial cost or first cost (ii) Salvage value at the
time of disposal.
A. Capital recovery cost
B. Operating cost
C. Total cost
D. Fixed cost
49. _____________________of an asset is the summation of capital recovery cost of the asset
and the annual equivalent operating cost of the asset.
A. Operating cost
B. Maintenance cost
C. Total cost or annual equivalent cost
D. Preventive cost
50. A firm is considering replacement of equipment, whose first cost is Rs. 4,500 and the scrap
value is negligible at the end of any year. Based on experience, it was found that the maintenance
cost is zero during the first year and it increases by Rs. 250 every year thereafter. When should
the equipment be replaced if i = 0%
A. 3rd year
B. 4th year
C. 5th year
D. 6th year