Physical assets life cycle analysis in a food industry company - case study

Abstract

Monitoring the life cycle of physical assets (PA) implies addressing issues, such as PA’s energy efficiency and its replacement and definition of the most proper moment to renew. The goals of this article are: to present a characterization of energy sources and analyze the PA life cycle in a food sector company. First, it will be characterized the costs and the expenses of the organization’s energy sources, then, a study about the replacement of PA is presented; Traditional methods were used, such as economic life; The models that underlie it are discussed throughout the article, using actual data, for validation. Three methods for depreciation of PA are used: Linear Depreciation; Sum of Digits and Exponential. Other methods were used to determine the Economic Cycle for replacing PA: Uniform Annual Expenditure (MRAU); Minimizing the Average Total Cost (MCMT); and the MCMT-Reduced to Present Value (MCMT-RVP). The equipment of the study was bakery ovens (gas and electrical). Results and conclusions from the application of the methods used in the evaluation of these PAs are presented. Highlights - Econometric models applied to physical assets’ Life Cycle to define the best time for a replacement. - Analysis of the LCC of equipment of food industry - Case study. - Models to increase availability and efficiency and contribute to increasing productivity. - Monitoring/data collection of equipment to Increase productivity/quality of products.