Alternative Layout and Automation of Optimality Results for Machine Replacement Problems Based On Stationary Data and Age Transition Perspectives

Abstract

Aim: This investigation aimed at automating the computations of optimal replacement policies and rewards for a class of equipment replacement problems based on time perspectives and stationary pertinent data. Methodology: The aim was achieved by the exploitation of the structure of the states given as functions of decision periods, in age-transition dynamic programming recursions. Results: Alternative Excel solution implementation templates were designed and automated for the determination of the optimal replacement policies in machine replacement problems, with pertinent data given only as functions of machines’ ages. Conclusion: The automation of these templates obviates the need for manual inputs of the states and stage numbering, as well as the inherent tedious and prohibitive manual computations associated with dynamic programming formulations and may be optimally exploited for sensitivity analyses on such models.