Sources of Used Equipment’ Purchase:
In general, the sources of used equipment are:
(1) Directly from the owner
(2) Used equipment dealers and
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(3) Brokers and auctioneers.
The majority of the purchase of used equipment is done from used equipment dealers and it is essential that every purchase executive in an organisation develops a list of sources of used equipment.
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The first source of used equipment the original owner is usually preferred by most prospective buyers as they feel that it is advantageous to buy the machine from the original owner as they can see the machine in operation at the source and also learn details about the usage history of the machine.
Reasons of Using Used Equipment:
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A purchaser may consider buying used equipment for the following reasons.
1. The cost of used machinery is substantially less than that of new equipment. Analysis of payback or rate of return may well reveal that a piece of used equipment is a better buy than a new machine. Even if this is not the case, a firm’s financial position may dictate the purchase of a lower priced machine.
2. Used equipment is frequently more quickly available than new equipment. In some situations, availability may override all other considerations.
3. A very common reason for the purchase of used equipment is that used equipment adequately satisfies the purchaser’s need, in which case there is no point in buying new equipment. In cases where operating requirements are not severe, a used machine in sound operating condition frequently provides economical service for many years. In the event that equipment is needed for standby or peak capacity operation, or for use on a short lived project, more often than not, used equipment satisfied the need adequately.