IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v160y2015icp26-33.html
   My bibliography  Save this article

Algorithms for asset replacement under limited technological forecast

Author

Listed:
  • Yatsenko, Yuri
  • Hritonenko, Natali

Abstract

The optimal asset replacement is analyzed when the future course of technological change is known on a limited future horizon. Comparison of factual and desired properties of known replacement methods leads us to the idea of how to improve their efficiency under changing technology reflected in decreasing operating and new asset costs. We introduce new modifications of the economic life and two-cycle variable-horizon methods by correcting their capital recovery factor. Next, we demonstrate that the modified methods deliver solutions equal or close to the infinite-horizon replacement under technological change.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:proeco:v:160:y:2015:i:c:p:26-33
    DOI: 10.1016/j.ijpe.2014.08.020
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925527314002783
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.ijpe.2014.08.020?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    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. Yatsenko, Yuri & Hritonenko, Natali, 2011. "Economic life replacement under improving technology," International Journal of Production Economics, Elsevier, vol. 133(2), pages 596-602, October.
    2. Farid Mardin & Takeshi Arai, 2012. "Capital Equipment Replacement Under Technological Change," The Engineering Economist, Taylor & Francis Journals, vol. 57(2), pages 119-129.
    3. Sophie Mercier, 2008. "Optimal replacement policy for obsolete components with general failure rates," Applied Stochastic Models in Business and Industry, John Wiley & Sons, vol. 24(3), pages 221-235, May.
    4. 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.
    5. P Scarf & R Dwight & A McCusker & A Chan, 2007. "Asset replacement for an urban railway using a modified two-cycle replacement model," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 58(9), pages 1123-1137, September.
    6. Goetz, Renan-Ulrich & Hritonenko, Natali & Yatsenko, Yuri, 2008. "The optimal economic lifetime of vintage capital in the presence of operating costs, technological progress, and learning," Journal of Economic Dynamics and Control, Elsevier, vol. 32(9), pages 3032-3053, September.
    7. Joseph C. Hartman & Chin Hon Tan, 2014. "Equipment Replacement Analysis: A Literature Review and Directions for Future Research," The Engineering Economist, Taylor & Francis Journals, vol. 59(2), pages 136-153, April.
    8. Suresh Sethi & Suresh Chand, 1979. "Planning Horizon Procedures for Machine Replacement Models," Management Science, INFORMS, vol. 25(2), pages 140-151, February.
    9. 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.
    10. Richardson, Steven & Kefford, Adrian & Hodkiewicz, Melinda, 2013. "Optimised asset replacement strategy in the presence of lead time uncertainty," International Journal of Production Economics, Elsevier, vol. 141(2), pages 659-667.
    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. Khanh T.P. Nguyen & Thomas Yeung & Bruno Castanier, 2017. "Acquisition of new technology information for maintenance and replacement policies," International Journal of Production Research, Taylor & Francis Journals, vol. 55(8), pages 2212-2231, April.
    3. Stutzman, Sarah & Weiland, Brandon & Preckel, Paul & Wetzstein, Michael, 2017. "Optimal replacement policies for an uncertain rejuvenated asset," International Journal of Production Economics, Elsevier, vol. 185(C), pages 21-33.
    4. 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.
    5. Yuri Yatsenko & Natali Hritonenko, 2016. "Asset replacement under improving operating and capital costs: a practical approach," International Journal of Production Research, Taylor & Francis Journals, vol. 54(10), pages 2922-2933, May.
    6. Alp, Osman & Tan, Tarkan & Udenio, Maximiliano, 2022. "Transitioning to sustainable freight transportation by integrating fleet replacement and charging infrastructure decisions," Omega, Elsevier, vol. 109(C).

    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. 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.
    2. Yatsenko, Yuri & Hritonenko, Natali, 2020. "Optimal asset replacement: Profit maximization under varying technology," International Journal of Production Economics, Elsevier, vol. 228(C).
    3. Yuri Yatsenko & Natali Hritonenko, 2016. "Asset replacement under improving operating and capital costs: a practical approach," International Journal of Production Research, Taylor & Francis Journals, vol. 54(10), pages 2922-2933, May.
    4. Mellal, Mohamed Arezki, 2020. "Obsolescence – A review of the literature," Technology in Society, Elsevier, vol. 63(C).
    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. Stutzman, Sarah & Weiland, Brandon & Preckel, Paul & Wetzstein, Michael, 2017. "Optimal replacement policies for an uncertain rejuvenated asset," International Journal of Production Economics, Elsevier, vol. 185(C), pages 21-33.
    7. Öner, K.B. & Kiesmüller, G.P. & van Houtum, G.J., 2015. "On the upgrading policy after the redesign of a component for reliability improvement," European Journal of Operational Research, Elsevier, vol. 244(3), pages 867-880.
    8. Adkins, Roger & Paxson, Dean, 2017. "Replacement decisions with multiple stochastic values and depreciation," European Journal of Operational Research, Elsevier, vol. 257(1), pages 174-184.
    9. 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.
    10. Adkins, Roger & Paxson, Dean, 2013. "Deterministic models for premature and postponed replacement," Omega, Elsevier, vol. 41(6), pages 1008-1019.
    11. Ben Abdallah, Skander & Lasserre, Pierre, 2016. "Asset retirement with infinitely repeated alternative replacements: Harvest age and species choice in forestry," Journal of Economic Dynamics and Control, Elsevier, vol. 70(C), pages 144-164.
    12. Boucekkine, R. & Fabbri, G. & Gozzi, F., 2010. "Maintenance and investment: Complements or substitutes? A reappraisal," Journal of Economic Dynamics and Control, Elsevier, vol. 34(12), pages 2420-2439, December.
    13. 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.
    14. Kredler, Matthias, 2014. "Vintage human capital and learning curves," Journal of Economic Dynamics and Control, Elsevier, vol. 40(C), pages 154-178.
    15. Wallace J. Hopp & Suresh K. Nair, 1991. "Timing replacement decisions under discontinuous technological change," Naval Research Logistics (NRL), John Wiley & Sons, vol. 38(2), pages 203-220, April.
    16. Bauer, L. & Mumey, G.A. & Lohr, W., 1989. "Economic Replacement Strategies for Dairy Cattle," Project Report Series 232069, University of Alberta, Department of Resource Economics and Environmental Sociology.
    17. Vu, Hai Canh & Do, Phuc & Barros, Anne & Bérenguer, Christophe, 2014. "Maintenance grouping strategy for multi-component systems with dynamic contexts," Reliability Engineering and System Safety, Elsevier, vol. 132(C), pages 233-249.
    18. Pinciroli, Luca & Baraldi, Piero & Zio, Enrico, 2023. "Maintenance optimization in industry 4.0," Reliability Engineering and System Safety, Elsevier, vol. 234(C).
    19. Suresh P. Sethi & Sushil Gupta & Vipin K. Agrawal & Vijay K. Agrawal, 2022. "Nobel laureates’ contributions to and impacts on operations management," Production and Operations Management, Production and Operations Management Society, vol. 31(12), pages 4283-4303, December.
    20. Suresh Chand & Tim McClurg & Jim Ward, 1993. "A single‐machine replacement model with learning," Naval Research Logistics (NRL), John Wiley & Sons, vol. 40(2), pages 175-192, March.

    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:160:y:2015:i:c:p:26-33. 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.