Impact of maintenance on replacement investment under technological improvement

Abstract : An unexplored important area in the equipment investment problem under technological improvement is the impact of maintenance policy. In fact, maintenance not only helps to maximize the profitability of the asset, but also prolong its economic life while waiting the apparition of better technology in the near future. Therefore, we propose a model that allows us to consider how replacement investment in a new or improved asset will be influenced by maintenance. The investment decisions are based on information about the profitability of the current asset and the technological environment. For the maintenance process, we also consider the dependency of its cost and efficiency on the deterioration state of asset that is represented by a profit parameter. We use a non-stationary Markov decision process to solve for the optimal investment/maintenance policy and illustrate the potential benefits of integrating maintenance policies in the investment strategy through different numerical analysis.
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Phuong Khanh Nguyen Thi, Thomas Yeung, Bruno Castanier. Impact of maintenance on replacement investment under technological improvement. ESREL 2011 Advances in Safety, Reliability and Risk Management, Sep 2011, France. pp.869-876. ⟨hal-00728079⟩

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