A Net Present Value Analysis of Opportunity-Based Age Replacement Models in Discrete Time
Jing Wu,
Cunhua Qian,
Tadashi Dohi
Abstract:Two important opportunistic age replacement models, under replacement first and last disciplines, are generalized in discrete time. The net present value (NPV) is applied to formulate the expected total costs. The priority of multiple replacement options is considered to classify the cost model with discounting into six cases. Since the NPV method accurately calculates the expected replacement costs over an infinite horizon in an unstable economic environment, we discuss some optimal opportunistic age replacem… Show more
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