Optimal maintenance and replacement decisions under technological change with consideration of spare parts inventories

T.P. Khanh Nguyen, Thomas G. Yeung and Bruno Castanier

International Journal of Production Economics, 2013, vol. 143, issue 2, 472-477

Abstract: Classical spare parts inventory models assume that the same vintage of technology will be utilized throughout the planning horizon. However, asset replacement often occurs in the form of a new technology that renders existing spare parts inventories obsolete. This paper aims to study the impact of spare parts inventory on equipment maintenance and replacement decisions under technological change via a Markov decision process formulation. The replacement decision is complex in that one must decide with which technology available on the market to replace the current asset. Under technological change, it is shown that the do nothing and repair options have significantly more value as they allow waiting the appearance of even better technologies in the future.

Keywords: Technology evolution; Spare parts; Equipment replacement; Maintenance; Markov decision process (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:143:y:2013:i:2:p:472-477

DOI: 10.1016/j.ijpe.2012.12.003

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