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Age Replacement with Adjustment and Depreciation Costs and Interest Charges
R. Cleroux and M. Hanscom
Vol. 16, No. 2 (May, 1974), pp. 235-239
Published by: Taylor & Francis, Ltd. on behalf of American Statistical Association and American Society for Quality
Stable URL: http://www.jstor.org/stable/1267944
Page Count: 5
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The age replacement policy which minimizes the average expected cost per unit time over an infinite time span is obtained in the case where the cost structure involves a term which takes into account adjustment costs, depreciation costs or interest charges which are suffered at fixed intervals of time of equal length. The optimal policy is shown to be nonrandom and sufficient conditions are given for it to be finite. Stopping rules in the search of this finite solution are also given. Finally some examples illustrate the procedure of finding these optimal policies.
Technometrics © 1974 American Statistical Association