Repair or replace? How to make the call with numbers

"Just fix it one more time" is the most expensive sentence in maintenance. Each repair looks cheap next to the price of a new machine, so old equipment stays in service long after it stopped making sense. The way out is to compare the two choices fairly: what does each one cost you per year?

Why the repair bill alone is misleading

A single repair invoice hides most of the cost of keeping an old machine. Older equipment often uses more energy, breaks down more often, and causes downtime that stops people or product. Those costs rarely show up on the repair bill, but you pay them every year.

The idea: equivalent annual cost

Equivalent annual cost (EAC) spreads the cost of an option evenly across the years you will use it. For a new machine, you take the purchase and install price, spread it over its expected life (with a small adjustment for the cost of money), then add the yearly running costs. For the old machine, you add up its yearly repairs, energy, downtime and any upcoming major overhaul.

Now you have two numbers measured the same way: cost per year to keep, and cost per year to replace. The lower number wins.

What to include

For both options, include yearly repair and maintenance cost, yearly energy cost, the cost of downtime (hours down times what an hour of downtime costs you), and any one-time costs like installation or a major rebuild. For the new machine, also include what you might get for selling or scrapping the old one.

Be honest about the inputs

The answer is only as good as the numbers. Use your own repair history where you have it. If you are estimating downtime cost, ask operations what an hour of a stopped line really costs. When you are unsure, try a low and a high guess and see if the answer changes. If both point the same way, you can decide with confidence.

Make it a habit, not a one-off

The best time to run this comparison is before the big repair, not after. Review your most critical aging assets once a year, ahead of budget season, so replacements are planned instead of forced by a breakdown.