Determination of the optimal investment in end products and repair resources

Marshall Rose

Naval Research Logistics Quarterly, 1973, vol. 20, issue 1, 147-159

Abstract: This paper demonstrates how to determine the minimal cost combination of end products and repair service capability in order to maintain a given level of operating end products. It is shown that the general rule for optimal resource allocation requires simply that the absolute value of the marginal factor cost of repair services divided by the marginal factor cost of end products be equal to the arrival rate of end products to repair. The model is applied to the problem of determining the resources required to support an operating level of Navy F‐4 aircraft.

Date: 1973
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Persistent link: https://EconPapers.repec.org/RePEc:wly:navlog:v:20:y:1973:i:1:p:147-159

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