Priorities
Discussion with stakeholders and abstract of key documents
Strategic Representation
for facility & portfolio stewardship
Main
Condition
Snapshot of conditions and amendments to established lifecycle plans
Management
Adhere to the overall strategy through optimized front-line decisions
Compliance
Evaluation of hidden cost and operations risks from non-complinace
Exceptions
Identify unique features and conditions that affect overall goals
Programming
Document and adhere to performance-affecting decisions
Funding
Understand sources and balancing of obligations
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Change the options to modify the chart and see the results instantly
Uses and Interpretations
Helping Owners make informed decisions is what Extenti is here for. While this calculator is hypothetical and specific cases will vary slightly, the flexibility of this calculator highlights the concepts of time, cost, and risk.
The advantages of being able to communciate with Owners about the increased risks, and their decisions around capital timing, are largely subjective and dependent on the level of risk aversion held by the Owner.
The ability to show three types of charts (timeline, cumulcative timeline, and sweetspot) along with comparing against not replacement, makes this chart usedul in conveying the concepts mentioned in a way that decision makers can interpret based on their individual goals.
Calculator Inputs and Chart Options
Inputs
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Replacement Year:
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Annual $ / Each:
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Replacement $:
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Number Of Escalators:
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Nominal Useful Life:
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Current Year In Life:
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NPV Rate:
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O&M Esc:
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Capital Esc:
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Maintenance Uplift:
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EAC Totals:
Options
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Use Options:
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Sweetspot:
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Timeline:
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Cumulative:
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Compare:
Maintenance Costs Increase
The costs to maintain a piece of equipment increase over time, even if a maintenance contract is fixed for a number of years, annualizing future cost increases to that contract helps to understand that increases are constant, in line with inflationary impacts or additional time needed to maintain aging equipment
Considered in this chart is that consistent increase of maintenance cost over time, and consideration for post-replacement warranty periods that will decrease the O&M cost for a number of years.
The math behind finding the right time to replace a piece of equipment is highly related to the ratio of cost to maintain vs. cost to replace.
Time Creates Risk
In the exapmple of an escalator, choosing to delay replacement of aging equipment increases the likelihood of costs that go above the standard maintenance agreements that likely exist. Specifically, the risk of equipment failure requiring non-standard response, parts, and labor explense
In addition to the direct costs of failure, indirect costs like customer and reputation impact, safety issues that generate insurance claims, and non-compliant redtags and accompanying additional management time are significant and have a bigger impact as time goes on.
Mitigating these risks by replacing aging equipment at appropriate times creates an environment of safety and proactivity while also capturing the lowest Total Cost of Occupancy.
Replacement Is Inevitable
Costs that impact reserve and replacement funds are generally separate from annual operating budgets, and typically require higher levels of planning and approvals. Owners benefit by understanding when these large costs might impact a building's funding sources.
In the case of Escalators, the expected life span depends on the quality of the initial equipment, how it was maintained, and how heavily it gets used. An esaclator with auto-off sensors and little usage will last many years longer than one under constant passenger load.
Considered here are replacement costs adjusted for future inflation. As the slider for Replacement Year is changed, the associated costs of O&M and Risk are also affected.