A New Approach to the Determination of Replacement Costs

Dr. Francois J. Olmer
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Dr. Francois J. Olmer: Armour Research Foundation of Illinois Institute of Technology, Chicago

Management Science, 1959, vol. 6, issue 1, 111-122

Abstract: The time adjusted minimum average costs of an industrial equipment or process are expressed in terms of the logarithmic decrement of its salvage values. The obsolescence gradient and/or the economic life of the equipment do not enter into the formula of the minimum average costs, which are thus obtained more simply and accurately than through the classical estimation procedures.

Date: 1959
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