IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v114y2008i1p230-238.html
   My bibliography  Save this article

Properties of optimal service life under technological change

Author

Listed:
  • Yatsenko, Yuri
  • Hritonenko, Natali

Abstract

The authors develop a new approach to model the optimal policies of machine replacement under technological change. They consider a single-machine replacement problem in continuous time and reduce it to a nonlinear integral equation for the variable optimal service life of machine. A qualitative analysis of this equation leads to new dynamic properties of the optimal replacement. A numeric example on industrial data about car replacement illustrates obtained analytic results. It confirms the validity and robustness of the developed technique and demonstrates its practical advantages.

Suggested Citation

  • Yatsenko, Yuri & Hritonenko, Natali, 2008. "Properties of optimal service life under technological change," International Journal of Production Economics, Elsevier, vol. 114(1), pages 230-238, July.
    • Handle: RePEc:eee:proeco:v:114:y:2008:i:1:p:230-238
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925-5273(08)00056-X
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Malcomson, James M., 1975. "Replacement and the rental value of capital equipment subject to obsolescence," Journal of Economic Theory, Elsevier, vol. 10(1), pages 24-41, February.
    2. Boucekkine, Raouf & Germain, Marc & Licandro, Omar, 1997. "Replacement Echoes in the Vintage Capital Growth Model," Journal of Economic Theory, Elsevier, vol. 74(2), pages 333-348, June.
    3. Yu. Yatsenko & N. Hritonenko, 2007. "Network economics and optimal replacement of age-structured IT capital," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 65(3), pages 483-497, June.
    4. James C. Bean & Jack R. Lohmann & Robert L. Smith, 1994. "Equipment replacement under technological change," Naval Research Logistics (NRL), John Wiley & Sons, vol. 41(1), pages 117-128, February.
    5. van Hilten, Onno, 1991. "The optimal lifetime of capital equipment," Journal of Economic Theory, Elsevier, vol. 55(2), pages 449-454, December.
    6. Sampath Rajagopalan & Medini R. Singh & Thomas E. Morton, 1998. "Capacity Expansion and Replacement in Growing Markets with Uncertain Technological Breakthroughs," Management Science, INFORMS, vol. 44(1), pages 12-30, January.
    7. Shabtay, Dvir & Kaspi, Moshe, 2002. "Optimization of the machining economics problem under the failure replacement strategy," International Journal of Production Economics, Elsevier, vol. 80(3), pages 213-230, December.
    8. Suresh Sethi & Suresh Chand, 1979. "Planning Horizon Procedures for Machine Replacement Models," Management Science, INFORMS, vol. 25(2), pages 140-151, February.
    9. Chand, Suresh & McClurg, Tim & Ward, Jim, 2000. "A model for parallel machine replacement with capacity expansion," European Journal of Operational Research, Elsevier, vol. 121(3), pages 519-531, March.
    10. S. Bylka & S. Sethi & G. Sorger, 1992. "Minimal forecast horizons in equipment replacement models with multiple technologies and general switching costs," Naval Research Logistics (NRL), John Wiley & Sons, vol. 39(4), pages 487-507, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yatsenko, Yuri & Hritonenko, Natali, 2020. "Optimal asset replacement: Profit maximization under varying technology," International Journal of Production Economics, Elsevier, vol. 228(C).
    2. Yatsenko, Yuri & Hritonenko, Natali, 2015. "Algorithms for asset replacement under limited technological forecast," International Journal of Production Economics, Elsevier, vol. 160(C), pages 26-33.
    3. Yatsenko, Yuri & Hritonenko, Natali, 2017. "Machine replacement under evolving deterministic and stochastic costs," International Journal of Production Economics, Elsevier, vol. 193(C), pages 491-501.
    4. Natali Hritonenko & Yuri Yatsenko, 2012. "Fleet replacement under technological shocks," Annals of Operations Research, Springer, vol. 196(1), pages 311-331, July.
    5. Yatsenko, Yuri & Hritonenko, Natali, 2011. "Economic life replacement under improving technology," International Journal of Production Economics, Elsevier, vol. 133(2), pages 596-602, October.
    6. Nguyen, T.P. Khanh & Yeung, Thomas G. & Castanier, Bruno, 2013. "Optimal maintenance and replacement decisions under technological change with consideration of spare parts inventories," International Journal of Production Economics, Elsevier, vol. 143(2), pages 472-477.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Natali Hritonenko & Yuri Yatsenko, 2012. "Fleet replacement under technological shocks," Annals of Operations Research, Springer, vol. 196(1), pages 311-331, July.
    2. Yu. Yatsenko & N. Hritonenko, 2007. "Network economics and optimal replacement of age-structured IT capital," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 65(3), pages 483-497, June.
    3. Blanca MARTINEZ, 2002. "Adoption Costs, Age of Capital and Technological Substitution," LIDAM Discussion Papers IRES 2002024, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    4. Boucekkine, Raouf & Licandro, Omar & Paul, Christopher, 1997. "Differential-difference equations in economics: On the numerical solution of vintage capital growth models," Journal of Economic Dynamics and Control, Elsevier, vol. 21(2-3), pages 347-362.
    5. Kredler, Matthias, 2014. "Vintage human capital and learning curves," Journal of Economic Dynamics and Control, Elsevier, vol. 40(C), pages 154-178.
    6. Boucekkine, Raouf & Pommeret, Aude, 2004. "Energy saving technical progress and optimal capital stock: the role of embodiment," Economic Modelling, Elsevier, vol. 21(3), pages 429-444, May.
    7. Suresh Chand & Vernon Ning Hsu & Suresh Sethi, 2002. "Forecast, Solution, and Rolling Horizons in Operations Management Problems: A Classified Bibliography," Manufacturing & Service Operations Management, INFORMS, vol. 4(1), pages 25-43, September.
    8. Gamboa, Franklin & Maldonado, Wilfredo Leiva, 2014. "Feasibility and optimality of the initial capital stock in the Ramsey vintage capital model," Journal of Mathematical Economics, Elsevier, vol. 52(C), pages 40-45.
    9. Mørch, Ove & Fagerholt, Kjetil & Pantuso, Giovanni & Rakke, Jørgen, 2017. "Maximizing the rate of return on the capital employed in shipping capacity renewal," Omega, Elsevier, vol. 67(C), pages 42-53.
    10. AZOMAHOU, Théophile & BOUCEKKINE, Raouf & NGUYEN-VAN, Phu, 2009. "Promoting clean technologies under imperfect competition," LIDAM Discussion Papers CORE 2009011, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    11. Fabrice Collard & Omar Licandro, 2020. "The neoclassical model and the welfare costs of selection," Discussion Papers 2020/03, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
    12. Natali Hritonenko & Yuri Yatsenko, 2008. "From Linear to Nonlinear Utility in Vintage Capital Models," Mathematical Population Studies, Taylor & Francis Journals, vol. 15(4), pages 230-248.
    13. Théophile T. Azomahou & Raouf Boucekkine & Phu Nguyen-Vanc, "undated". "Promoting Clean Technologies: The Energy Market Structure Crucially Matters," Working Papers 2008_13, Business School - Economics, University of Glasgow.
    14. Boucekkine, Raouf & Germain, Marc & Licandro, Omar, 1997. "Replacement Echoes in the Vintage Capital Growth Model," Journal of Economic Theory, Elsevier, vol. 74(2), pages 333-348, June.
    15. Omar Licandro, 2015. "Firm Dynamics in the Neoclassical Growth Model," Discussion Papers 2015/17, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
    16. Raouf Boucekkine & Giorgio Fabbri & Patrick-Antoine Pintus, 2011. "On the optimal control of a linear neutral differential equation arising in economics," Working Papers halshs-00576770, HAL.
    17. Yatsenko, Yuri & Hritonenko, Natali, 2020. "Optimal asset replacement: Profit maximization under varying technology," International Journal of Production Economics, Elsevier, vol. 228(C).
    18. Martínez-Costa, Carme & Mas-Machuca, Marta & Benedito, Ernest & Corominas, Albert, 2014. "A review of mathematical programming models for strategic capacity planning in manufacturing," International Journal of Production Economics, Elsevier, vol. 153(C), pages 66-85.
    19. Raouf Boucekkine & Natali Hritonenko & Yuri Yatsenko, "undated". "Optimal Firm Behavior under Environmental Constraints," Working Papers 2008_11, Business School - Economics, University of Glasgow.
    20. Feichtinger, Gustav & Hartl, Richard F. & Kort, Peter M. & Veliov, Vladimir M., 2006. "Anticipation effects of technological progress on capital accumulation: a vintage capital approach," Journal of Economic Theory, Elsevier, vol. 126(1), pages 143-164, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:114:y:2008:i:1:p:230-238. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.