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Minimal forecast horizons in equipment replacement models with multiple technologies and general switching costs

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  • S. Bylka
  • S. Sethi
  • G. Sorger

Abstract

This article considers the problem of equipment replacement in which the replacement decision at a particular time must take into account (i) the state of the existing machine in use, (ii) the available replacement alternatives at the time, (iii) the future advances in the relevant technologies with regard to the equipment under consideration, and (iv) costs of switching between different technologies. A methodology that attains minimal forecast horizons for the problem is developed. A numerical example illustrates the methodology.

Suggested Citation

  • 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.
    • Handle: RePEc:wly:navres:v:39:y:1992:i:4:p:487-507
    DOI: 10.1002/1520-6750(199206)39:43.0.CO;2-6
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. 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.
    3. 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.
    4. Su, Chao-Ton & Wu, Sung-Chi & Chang, Cheng-Chang, 2000. "Multiaction maintenance subject to action-dependent risk and stochastic failure," European Journal of Operational Research, Elsevier, vol. 125(1), pages 133-148, August.
    5. 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.
    6. 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.
    7. Mellal, Mohamed Arezki, 2020. "Obsolescence – A review of the literature," Technology in Society, Elsevier, vol. 63(C).
    8. 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.

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