On Renewal Decisions.
Abstract
A system must operate for T units of time. A certain component is essential for the system to be operative. When it fails it must be replaced. However, there are n types of components that can be used; some types are more costly but tend to last longer -- others are cheaper but are not likely to last as long. The general problem is to assign the initial component type and all subsequent replacements so as to minimize the expected cost of providing an operative component for the life of the system. Intuition would suggest that when the system is relatively new and a replacement is necessary it would be rational to use an expensive type providing the additional component life bought is worth the extra price; similarly when the system is old, an inexpensive type should be used. Consideration of this problem is intended to make this intuition more precise and to explore under what conditions it is, in fact, valid. The problem can be viewed as one in discrete time parameter negative dynamic programming.
Document Details
- Document Type
- Technical Report
- Publication Date
- Aug 08, 1977
- Accession Number
- ADA044896
Entities
People
- C. Derman
- G. J. Lieberman
- S. Ross
Organizations
- Stanford University