Appendix C: PRODUCTION EQUIPMENT REPLACEMENT FACTORS (Cont)

TM 38-260

** Metal Cutting and Metal Forming Machine Tools are subgroups of the Metalworking Machinery and equipment group.

They include conventionally and numerically controlled machine tools and parts for same.

*** Special Tooling as used in this column means jigs, dies, fixtures, molds, patterns, taps, gauges, and other equipment

which are of such a specialized nature that without substantial modification or alteration their use is limited to the

development or production of particular supplies or performance of particular services (FAR 45.101)

**** The Special Test Equipment column applies to single or multi-function test equipment, measuring and controlling

devices, physical properties testing and optical and analytical instruments engineered, designed, fabricated or modified to

accomplish special purpose testing. Special Test Equipment consists of items or assemblies of equipment including

standard or general purpose item or components that are interconnected and interdependent so as to become a new

functional entity for special testing purposes (FAR 45.101).

NOTES:

a. Acquisition cost times replacement factor equals replacement value.

b. Because of the continuous technological improvement in machine tools and the increasing number of " ustom

built" machines, reliable wholesale price indexes (which are intended to measure price changes not influenced by

changes in quality, product mix, etc.) are difficult to develop. Recognizing this fact, the data should be used with caution.

If available, new replacement prices should be used.

c. Changes in calculating the Finished Goods Price Index were published by the U.S. Department of Labor, Bureau

of Labor Statistics in January 1988 which affected the calculations for developing the replacement factors. IEA developed

new replacement factors based upon the indexes provided and previous available data. Replacement factors are based

on an average price index through January 1993.

C-2