The dynamics of asset lifetime under technological change

✍ Scribed by Natali Hritonenko; Yuri Yatsenko

• Publisher: Elsevier Science
• Year: 2008
• Tongue: English
• Weight: 494 KB
• Volume: 36
• Category: Article
• ISSN: 0167-6377
• DOI: 10.1016/j.orl.2008.04.003

✦ Synopsis

The variable lifetime of assets is analyzed in a serial replacement problem. Technological change impacts the maintenance cost and new asset cost. The optimal asset lifetime appears to be constant only when both costs decrease with the same rate. We identify cases when the technological change decreases or increases the optimal lifetime.