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Replacement Decisions with Maintenance Under Uncertainty: An Imbedded Optimal Control Model

Author

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  • Ali Dogramaci

    (Department of Industrial Engineering, Bilkent University, Ankara 06800, Turkey)

  • Nelson M. Fraiman

    (Graduate School of Business, Columbia University, New York, New York 10027)

Abstract

How should a manager make replacement decisions for a chain of machines over time if each is maintained by an optimal control model addressing uncertainty of machine breakdowns? A network representation of the problem involves arcs with interdependent costs. A solution algorithm is presented and replacement considerations under technological change are incorporated into a well-known optimal control model for maintenance under uncertainty (that of Kamien and Schwartz 1971). The method is illustrated by an example.

Suggested Citation

  • Ali Dogramaci & Nelson M. Fraiman, 2004. "Replacement Decisions with Maintenance Under Uncertainty: An Imbedded Optimal Control Model," Operations Research, INFORMS, vol. 52(5), pages 785-794, October.
    • Handle: RePEc:inm:oropre:v:52:y:2004:i:5:p:785-794
    DOI: 10.1287/opre.1040.0133
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    References listed on IDEAS

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    Cited by:

    1. Alain Bensoussan & Suresh P. Sethi, 2007. "The Machine Maintenance and Sale Age Model of Kamien and Schwartz Revisited," Management Science, INFORMS, vol. 53(12), pages 1964-1976, December.
    2. A. Bensoussan & Q. Feng & S. P. Sethi, 2022. "Integrating equipment investment strategy with maintenance operations under uncertain failures," Annals of Operations Research, Springer, vol. 317(2), pages 353-386, October.
    3. Borgonovo, E., 2010. "The reliability importance of components and prime implicants in coherent and non-coherent systems including total-order interactions," European Journal of Operational Research, Elsevier, vol. 204(3), pages 485-495, August.
    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. Michael Jong Kim & Viliam Makis, 2013. "Joint Optimization of Sampling and Control of Partially Observable Failing Systems," Operations Research, INFORMS, vol. 61(3), pages 777-790, June.
    6. Mellal, Mohamed Arezki, 2020. "Obsolescence – A review of the literature," Technology in Society, Elsevier, vol. 63(C).
    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.

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