Avoided Cost

Written by Jerry Ratzlaff on . Posted in Manufacturing Engineering

Avoided cost, abbreviated as AC, is an estimated saving based onpreventive measures.

 

Avoided cost Formula

\(\large{ AC =  ARC + PL - PMC }\)  

Where:

\(\large{ AC }\) = avoided cost

\(\large{ ARC }\) = assumed repair cost

\(\large{ PMC }\) = preventive maintenance cost

\(\large{ PL }\) = production losses

 

Tags: Equations for Manufacturing