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51 How to Use This Guide This guide, the replacement optimization tool, and the toolâs user manual should be used together to implement the recommended replacement processes. The guide applies to all major types and classes of highway operations equipment, both on-road and off-road. Fleet replacement is both art and science. On one hand, sound analysis based on quality data provides the information that fleet managers need to make sensible replacement deci- sions. On the other hand, the results produced by the optimi- zation analysis sometimes require review and interpretation beyond that obtained solely from analytics. A general understanding of equipment cost analysis can provide a foundation for applying the processes and resources outlined in this guide. Chapter 3 describes the approach for determining optimal life cycles using life cycle cost analysis (LCCA) for highway operations equipment. Chapter 4 out- lines the equipment classification structure, and Chapter 5 describes the factors used in cost and replacement analysis. Chapter 6 describes rational and practical equipment replacement processes that consider the real-world environ- ment of highway operations. These processes are used for iden- tifying replacement needs, determining budget requirements, and making replacement decisions. The concepts outlined in this chapter can be used to help implement an agencyâs system- atic replacement program. Chapter 7 provides a case example to demonstrate the use of the tool and the replacement processes, using actual data from a fleet agency source. The processes recommended in this guide and the factors built into the tool are based on industry best practices and norms. The optimization tool and the replacement processes can be used to â¢ Determine optimal equipment life cycles. â¢ Determine when an individual equipment unit has reached, or the equipment unit is projected to reach, its economic life. â¢ Establish current replacement needs. â¢ Prioritize the replacement of individual equipment units. â¢ Estimate future equipment replacement needs and budgets. â¢ Evaluate the consequences of not replacing equipment at optimal cycles. C H A P T E R 2