Optimal replacement under variable intensity of utilization and technological progress.: An article from: Engineering Economist
Description
This digital document is an article from Engineering Economist, published by Institute of Industrial Engineers, Inc. (IIE) on January 1, 1998. The length of the article is 6451 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.
From the author: We presented two modifications of the traditional model of optimal replacement of capital equipment. Starting from cost-minimization over an infinite horizon, we introduced a variable intensity of utilization in the traditional replacement model to explain functional degradation, i.e., the reduction in utilization intensity as equipment ages. Next, we demonstrated that when technological progress is ongoing, the basic model of optimal replacement can give erroneous results due to neglecting the opportunity cost of foregone technological progress at the time of replacement.
Citation Details
Title: Optimal replacement under variable intensity of utilization and technological progress.
Author: G. Bethuyne
Publication:Engineering Economist (Refereed)
Date: January 1, 1998
Publisher: Institute of Industrial Engineers, Inc. (IIE)
Volume: v43 Issue: n2 Page: p85(21)
Distributed by Thomson Gale
From the author: We presented two modifications of the traditional model of optimal replacement of capital equipment. Starting from cost-minimization over an infinite horizon, we introduced a variable intensity of utilization in the traditional replacement model to explain functional degradation, i.e., the reduction in utilization intensity as equipment ages. Next, we demonstrated that when technological progress is ongoing, the basic model of optimal replacement can give erroneous results due to neglecting the opportunity cost of foregone technological progress at the time of replacement.
Citation Details
Title: Optimal replacement under variable intensity of utilization and technological progress.
Author: G. Bethuyne
Publication:Engineering Economist (Refereed)
Date: January 1, 1998
Publisher: Institute of Industrial Engineers, Inc. (IIE)
Volume: v43 Issue: n2 Page: p85(21)
Distributed by Thomson Gale
