Replacement Models Revisited
Replacement is an aspect of operations research. In this paper various aspects of replacement have been considered. They include reasons for replacement, replacement assumptions and replacement policies, single and group types of replacement and some of the existing quantitative techniques of replacement. The objective is to review the annual total cost and the cumulative annual total cost average hitherto used as replacement methods. The study showed some disparity in the optimal age of single replacement as used by some authors. Hence, an arithmetic mean method of finding the optimal single- replacement- age of an asset has been proposed with an assumption that the asset is fit for the first n years, the value of n depending on the prevailing situation; examples of this newly proposed arithmetic-mean method are compared to the results of some of the existing ones. It is concluded that the method is more reliable and simpler than the older ones.
JORIND Vol. 5 (1) 2007: pp. 23-27