S-Space College of Business Administration/Business School (경영대학/대학원) Institute of Management Research (경영연구소) 경영논집 경영논집 vol.05 (1971)
A STUDY OF OPTIMUM REPLACEMENT POLICY
- Lee, Jae Kwan
- Issue Date
- 서울대학교 경영연구소
- 경영논집, Vol.5 No.2, pp. 35-83
- The problems concerned with replacement of equipment, parts and components, and personnel can generally be viewed in two ways, depending on the life pattern of the above items. The first is a kind of replacement which has resulted from deterioration of items in use(Category I) and the second is a kind of replacement which has resulted from instantaneous and complete failure of items in use(Category II).
Category I replacement deals mainly with such• alternative measures as whether to make continuous use of outworn and inefficient equipment without replacing it or introduce more efficient equipment by sacrificing the replacement cost. Category II replacement can in turn be divided into two parts; (1) the failure of anyone item can result in the failure of the entire system and (2) with the increase in the number of failures in a system, the overall efficiency of the system will accordingly drop.
In the former case each faulty item should be replaced at the time of failure but it is really in the latter case that the alternative problem arises of whether to keep the inefficient equipment or to replace the failures at the sacrifice of replacement cost. In this thesis only the latter case in Category II replacement will be analyzed and studied in some detail.