Replacement of Capital Equipment

P. A. Scarf and J. C. Hartman
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P. A. Scarf: University of Salford
J. C. Hartman: Lehigh University in Bethlehem

Chapter 12 in Complex System Maintenance Handbook, 2008, pp 287-319 from Springer

Abstract: Abstract Businesses require equipment in order to function and deliver their outputs. In the global, competitive environment, this equipment is critical to success. However, equipment generally degrades with age and usage, and investment is required to maintain the functional performance of equipment. For example, in mass urban transportation, annual expenditure on equipment replacement for the Hong Kong underground is of the order of $50 million, and further, the Hong Kong underground network is a fraction of the size of that in London, Paris or New York. Where equipment replacement impacts significantly on the bottom line of a corporation and decision-making about such expenditure is under the control of the company executive, the modelling of such decision making is within the scope of this chapter.

Keywords: Planning Horizon; Penalty Cost; Replacement Policy; Infinite Horizon; Capital Equipment (search for similar items in EconPapers)
Date: 2008
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DOI: 10.1007/978-1-84800-011-7_12

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