The dynamics of asset lifetime under technological change

The dynamics of asset lifetime under technological change

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Article ID: iaor20102876
Volume: 36
Issue: 5
Start Page Number: 565
End Page Number: 568
Publication Date: Sep 2008
Journal: Operations Research Letters
Authors: ,
Keywords: financial
Abstract:

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.

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