OPTIMAL MAINTENANCE POLICY AND SALE DATE OF A MACHINE.
CARNEGIE INST OF TECH PITTSBURGH PA MANAGEMENT SCIENCES RESEARCH GROUP
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A machine is to be bought, used for productive purposes for a length of time, and then sold. It is possible to do preventive maintenance while the machine is being used, if desired, in order to slow down the degradation of the machines capability. The value of owning the machine is the sum of the discounted value of the machine when sold. In this paper a modification of a model due to B. Naslund for the problem is discussed. Using Pontryagins maximum principle, the problem is treated as one of optimal control with the control variables being the use or nonuse of preventive maintenance and the selection of the sale date. It is shown that the optimal maintenance policy is bang-bang, and methods for finding the optimal sale date are determined. Simple examples show the various kinds of solutions that can be obtained with varying assumptions concerning the actual functions used in the model. Author
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