Premium
The parallel replacement problem with demand and capital budgeting constraints
Author(s) -
Hartman Joseph C.
Publication year - 2000
Publication title -
naval research logistics (nrl)
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.665
H-Index - 68
eISSN - 1520-6750
pISSN - 0894-069X
DOI - 10.1002/(sici)1520-6750(200002)47:1<40::aid-nav3>3.0.co;2-t
Subject(s) - integer programming , integer (computer science) , mathematical optimization , time horizon , linear programming relaxation , variable (mathematics) , capital budgeting , computer science , computation , operations research , economics , mathematics , microeconomics , algorithm , mathematical analysis , programming language , project appraisal
A generalized parallel replacement problem is considered with both fixed and variable replacement costs, capital budgeting, and demand constraints. The demand constraints specify that a number of assets, which may vary over time, are required each period over a finite horizon. A deterministic, integer programming formulation is presented as replacement decisions must be integer. However, the linear programming relaxation is shown to have integer extreme points if the economies of scale binary variables are fixed. This allows for the efficient computation of large parallel replacement problems as only a limited number of 0–1 variables are required. Examples are presented to provide insight into replacement rules, such as the “no‐splitting‐rule” from previous research, under various demand scenarios. © 2000 John Wiley & Sons, Inc. Naval Research Logistics 47: 40–56, 2000