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Equipment replacement under technological change
Author(s) -
Bean James C.,
Lohmann Jack R.,
Smith Robert L.
Publication year - 1994
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 - 10.1002/1520-6750(199402)41:1<117::aid-nav3220410108>3.0.co;2-u
Subject(s) - truncation (statistics) , revenue , horizon , mathematical economics , mathematical optimization , computer science , operations research , economics , mathematics , finance , geometry , machine learning
For infinite‐horizon replacement economy problems it is common practice to truncate the problem at some finite horizon. We develop bounds on the error due to such a truncation. These bounds differ from previous results in that they include both revenues and costs. Bounds are illustrated through a numerical example from a real case in vehicle replacement. © 1994 John Wiley & Sons, Inc.