Overhaul Policy Optimization and Equipment Valuation Concerning Its Reliability

S. Smolyak
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S. Smolyak: Central Economics and Mathematics Institute Russian Academy of Sciences, Moscow, Russia

Journal of the New Economic Association, 2014, vol. 22, issue 2, 102-131

Abstract: Valuation of used machinery and equipment items and optimization of the overhaul policy are considered as interrelated problems. Non-traditional version of the discounted cash flow method is applied to their decision. The model uses available market and technical information and takes into account both the planned overhauls and the ones due to random failures. The model allows to find the dependence of the value of equipment item on its age and working time in the current overhaul interval and also operatively to make a well-grounded choice between overhaul and decommissioning of an item.

Keywords: machinery; equipment; value; valuation; best use; reliability; failure; overhaul; overhaul interval; management; discounted cash flow method (search for similar items in EconPapers)
JEL-codes: C44 C61 D46 L64 M21 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:nea:journl:y:2014:i:22:p:102-131

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