Length of Operational Life and Its Impact on Life-Cycle Costs of a Tractor in Switzerland
AbstractAssuming full exhaustion of their estimated service life—also referred to as estimated technical working life—the low annual utilisation of agricultural machines in Switzerland leads to a long operational life. To determine the costs of an additional year’s service, we calculate the life-cycle costs (LCCs), which encompass all costs for an 82 kW four-wheel-drive tractor over its entire operational life. Assuming full utilisation of the estimated service life of 10,000 h, five operating versions are compared, each with an operational life of between 10 and 30 years and matched annual utilisations between 1000 h and 333 h. A key finding is that an additional year in service increases LCCs by 4.5% of the tractor’s purchase price. In addition, we carry out a sensitivity analysis by applying discount rates of between 0% and 4%, finding that a comparatively high discount rate of 3% leads to almost identical LCCs for all operating versions. We conclude that the annual utilisation and the resulting duration of operational life have a strong impact on LCCs. A short operational life associated with high annual utilisation is a promising strategy for substantially cutting machinery costs. View Full-Text
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Lips, M. Length of Operational Life and Its Impact on Life-Cycle Costs of a Tractor in Switzerland. Agriculture 2017, 7, 68.
Lips M. Length of Operational Life and Its Impact on Life-Cycle Costs of a Tractor in Switzerland. Agriculture. 2017; 7(8):68.Chicago/Turabian Style
Lips, Markus. 2017. "Length of Operational Life and Its Impact on Life-Cycle Costs of a Tractor in Switzerland." Agriculture 7, no. 8: 68.
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