The following costs are associated with the failure of a compressor: Repair cost

Question

The following costs are associated with the failure of a compressor:

Repair costs: $15000        Downtime costs: $45000

A) If a breakdown maintenance strategy is followed, the compressor will break down on average once every two years. What is the annual maintenance cost?

B) If a preventive maintenance strategy is followed, the compressor is serviced once per month at a cost of a $1000 per service, and the compressor is overhauled once every second year at a cost of $16000. The new probability of a breakdown is 1 failure every 20 years. What is the annual maintenance cost in this case?

C) If a predictive maintenance strategy is followed, the compressor is inspected once per month with the following costs:

- Vibration analysis $350 per inspection

- Oil analysis $300 per inspection

- Thermographic imaging $150 per inspection

The compressor now requires an overhaul service once every three years at a cost of $16000. The new probability of a breakdown is 1 failure every 30 years. What is the annual maintenance cost for this case?

D) Compare and discuss the costs of the three approaches.

Explanation / Answer

A. Breakdown Maintenance strategy

Total cost / 2 year = $15000 + $45000
= $60000 in 2 years
So, annual maintainance cost = 60000/2 = $30000


B. Preventive Maintenance strategy

We will first calculate cost in 20 years
Service cost = $1000/month
Service cost of year = $12000
Service cost of 20 years = $240000 (1)

Compressor overhauling every 2 years = $16000
Cost of compressor overhaulig in 20 years = 16000 x 10 = $160000 (2)

Failure cost after 20 years = $60000 (as in 1st part) (3)

So total cost in 20 yrs = (1) + (2) + (3)
   = $240000 + $160000 + $60000
   = $460000

So, annual maintenance cost = $460000/20 = $23000



C. Predictive Maintenance strategy

We will first calculate total cost in 30 years.

Monthly cost = $350 + $300 + $150 = $800
Cost in 30 years = $800 x 12 x 30 = $288000 (1)

Overhauling cost every 3 years = $16000
Overhauling cost in 30 years = $16000 x 10 = $160000 (2)

Failure cost = $60000 (As in part 1) (3)

Total cost in 30 years = (1) + (2) + (3)
   = $288000 + $160000 + $60000
   = $508000

So, annual maintenance cost = $508000/30 = $16994


D. Comparison

As we see from our results predictive maintenance strategy is the best strategy in the long run. Approximately it costs $13000 less per year for maintenance than the breakdown maintenance strategy. So in the long run predictive maintenance strategy should be adopted.

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