A mixed optimization technique for optimal machine replacement is presented which allows much more flexibility than previous models. Optimal purchase, maintenance and sale of a given machine between any two given points in time is treated as a subproblem, which one may choose to solve via control theory, dynamic programming, or practical engineering considerations. A control theory formulation is used in the paper as an illustration. These subproblem solutions are then incorporated into a Wagner-Whitin formulation for solution of the full problem. The technique is particularly useful for problems with such asymmetries as an existing initial machine or uneven technological change. A simple numerical example is solved in the Appendix.PDF Version: Sethi, S. P. and Morton, T.E., "A Mixed Optimization Technique for the Generalized Machine Replacement Problem," Management Sciences Research Report #241, GSIA, Carnegie-Mellon University, November 1971.
[1]
E. Polak,et al.
Theory of optimal control and mathematical programming
,
1969
.
[2]
Suresh P. Sethi.
Simultaneous Optimization of Preventive Maintenance and Replacement Policy for Machines: A Modern Control Theory Approach
,
1971
.
[3]
Gerald L. Thompson,et al.
Optimal Maintenance Policy and Sale Date of a Machine
,
1968
.
[4]
J. B. Lathrop,et al.
Principles of operations research
,
1954,
Electrical Engineering.
[5]
Bertil Näslund.
Simultaneous Determination of Optimal Repair Policy and Service Life
,
1966
.
[6]
Gerald L. Thompson,et al.
THE DISCRETE MAXIMUM PRINCIPLE WITH APPLICATIONS TO MANAGEMENT SCIENCE.
,
1968
.
[7]
George Willard Terborgh,et al.
Dynamic equipment policy
,
1949
.