# Component Repair vs Exchange Breakeven Calculator

> Source: https://netray.co/tools/mro-repair-vs-exchange-breakeven-calculator
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

Compare repairing a rotable with exchanging it, adjusting for loaner cost, turn time, beyond-economic-repair probability and remaining life, and find the breakeven repair price.

## Category

aerospace-defense

## Industry

Aerospace MRO

## Audience

- Component planner
- Buyer
- MRO commercial manager

## Tool

**Kind:** calculator

**Currency:** $

**Inputs:**

#### Repair quote

**Key:** repair_cost

**Type:** number

**Default:** 18000

**Min:** 0

**Step:** 500

**Unit:** $

**Help:** Quoted price for the repair, including test.

#### Repair turn time

**Key:** repair_tat

**Type:** number

**Default:** 45

**Min:** 0

**Step:** 1

**Unit:** days

#### Remaining life after repair

**Key:** repair_life

**Type:** slider

**Default:** 70

**Min:** 10

**Max:** 100

**Step:** 5

**Unit:** %

**Help:** Expected life versus a new or fully overhauled unit.

#### Probability of beyond economic repair

**Key:** ber

**Type:** slider

**Default:** 15

**Min:** 0

**Max:** 60

**Step:** 1

**Unit:** %

**Help:** If found BER you still buy the exchange unit.

#### Exchange or purchase price

**Key:** exchange_cost

**Type:** number

**Default:** 52000

**Min:** 0

**Step:** 1000

**Unit:** $

#### Exchange delivery time

**Key:** exchange_tat

**Type:** number

**Default:** 5

**Min:** 0

**Step:** 1

**Unit:** days

#### Remaining life of exchange unit

**Key:** exchange_life

**Type:** slider

**Default:** 100

**Min:** 10

**Max:** 100

**Step:** 5

**Unit:** %

#### Cost of a day without the part

**Key:** loaner_rate

**Type:** number

**Default:** 450

**Min:** 0

**Step:** 25

**Unit:** $/day

**Help:** Pool or loaner fee, or carrying cost of the spare you tie up.

**Outputs:**

#### Expected repair spend including BER risk

**Key:** repair_direct

**Expr:** repair_cost + ber / 100 * exchange_cost

**Format:** currency

#### Repair total with downtime cost

**Key:** repair_total

**Expr:** repair_direct + repair_tat * loaner_rate

**Format:** currency

#### Exchange total with downtime cost

**Key:** exchange_total

**Expr:** exchange_cost + exchange_tat * loaner_rate

**Format:** currency

#### Repair cost per full life

**Key:** repair_adj

**Expr:** repair_total / (repair_life / 100)

**Format:** currency

**Description:** Total divided by the fraction of a full life you get.

#### Exchange cost per full life

**Key:** exchange_adj

**Expr:** exchange_total / (exchange_life / 100)

**Format:** currency

#### Saving from repairing instead of exchanging

**Key:** saving

**Expr:** exchange_adj - repair_adj

**Format:** currency

**Primary:** true

**Description:** Positive means repair is cheaper per full life.

#### Breakeven repair quote

**Key:** breakeven

**Expr:** max(exchange_adj * repair_life / 100 - ber / 100 * exchange_cost - repair_tat * loaner_rate, 0)

**Format:** currency

**Primary:** true

**Description:** Highest repair price at which repair still matches exchange.

**Chart:**

#### Cost per full life vs repair quote

**Type:** line

**X:** repair_cost

**From:** 2000

**To:** 80000

**Steps:** 30

**Series:**

- repair_adj
- exchange_adj

**Disclaimer:** Simplified comparison. It ignores warranty differences, core charges, tax and any cost of failed borrowed units.

## Content

**Intro:** A repair quote looks cheap until you add the time the aircraft waits and the chance that the shop finds the unit beyond economic repair. This calculator puts repair and exchange on the same footing so you can see which one costs less per unit of remaining life.

**Sections:**

#### How to use the calculator

**Body:** Enter the repair quote, turn time and the life you expect afterwards. Add the probability that teardown finds the unit beyond economic repair (BER), then the exchange price, its delivery time and life. The cost of a day without the part is whatever a pool loaner, lease or tied-up spare costs you. The tool outputs the saving per full life and the highest repair price you should accept.

#### The logic

**Body:** A repair that ends in BER still costs you the replacement, so the expected spend includes the BER probability times the exchange price. Both options carry downtime cost for their turn time. Dividing each total by the fraction of full life delivered puts them on a like-for-like basis, since a repaired unit with a shorter expected life is not as valuable as a new one.

**Bullets:**

- Repair total = quote + BER x exchange price + turn days x day cost
- Exchange total = price + delivery days x day cost
- Adjusted cost = total / life fraction
- Breakeven quote solves repair adjusted = exchange adjusted

#### Worked example

**Body:** With an 18,000 dollar quote, 45 days, 70 percent life, 15 percent BER risk and a 52,000 dollar exchange at 100 percent life, repair costs about 46,000 dollars per full life against 54,000 for exchange, so repair saves about 8,000. The breakeven quote is roughly 27,000 dollars. Raise the BER risk to 40 percent and the advantage shrinks sharply.

#### Common mistakes

**Body:** Ignoring BER risk, using unit price while forgetting that a pooled part may be free of core charges, and assuming repair returns full life are common. Track your real BER rate and post-repair removal rates by part number and vendor so these inputs come from data and not a guess.

**Cta:** Netray can build an agent over your purchasing and repair order history that calculates BER rate and repair cost per part number and vendor on demand.

**Faq:**

#### Where do I get the BER probability?

**Answer:** From your own repair orders: count units returned as beyond economic repair divided by units sent to that vendor for that part number. If history is thin, ask the vendor for their rate and treat it as a lower bound.

#### What is a fair cost of a day without the part?

**Answer:** Use the pool or loaner daily fee when you rent one. If you carry spares, use the carrying cost of the spare. For AOG exposure use a separate delay cost model.

#### Why divide by remaining life?

**Answer:** Because a repair that gives 70 percent of the life is worth less than a new unit. Without the adjustment the comparison favours whatever is cheapest upfront and not what is cheapest to operate.

#### Does this cover the cost of a core?

**Answer:** No. If your exchange includes a core credit or charge, net it off the exchange price before entering it.

## Search terms

repair vs replace aircraft component, repair or exchange calculator, beyond economic repair calculator, rotable repair breakeven, component repair cost comparison, exchange vs overhaul cost, BER rate cost impact, repair economics aviation

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