Splitting the exergy destruction into endogenous/exogenous and unavoidable/avoidable parts represents a new development in the exergy analysis of energy conversion systems. This splitting improves the accuracy of exergy analysis, improves our understanding of the thermodynamic inefficiencies and facilitates the improvement of a system. An absorption refrigeration machine is used here as an application example. This refrigeration machine represents the most complex type of a refrigeration machine, in which the sum of physical and chemical exergy is used for each material stream. (C) 2007 Elsevier Ltd. All rights reserved.