Factors That Affect The Equipment Rate

摘要

The equipment rate means many things to many people. People within the organization use it to estimate costs and measure performance, but they forget that the rate is nothing more than an interim estimate for the actual full lifecycle equipment cost the organization expects to experience if everything proceeds as planned.rnThe need to establish an hourly, weekly or monthly rate for a machine stems from the fact that most equipment costs occur in relatively large, discrete amounts spread at random times throughout the life of the machine. The rate averages out these large, infrequent expenditures and spreads them evenly over the life of the machine so that costs can be estimated and performance can be measured over shorter periods of time. The rate is, in fact, much like an insurance premium: You pay relatively small, regular amounts to cover the cost of the large transactions that you expect will, but hope will not, occur in the future. As with an insurance premium, the higher and more frequent the claims, the higher the payments.