A mixed-integer programming approach to the parallel replacement problem under technological change

I. Esra Büyüktahtakin, Joseph C. Hartman

Research output: Contribution to journalArticlepeer-review

16 Scopus citations

Abstract

The parallel replacement problem under economies of scale (PRES) determines minimum cost replacement policies for each asset in a group of assets that operate in parallel and are subject to fixed and variable purchase costs. We study the mixed-integer programming formulation of PRES under technological change by incorporating capacity gains into the model such that newer, technologically advanced assets have higher capacity than assets purchased earlier. We provide optimal solution characteristics and insights about the economics of the problem and derive associated cutting planes for optimising the problem. Computational experiments illustrate that the inequalities are quite effective in solving PRES under technological change instances.

Original languageEnglish (US)
Pages (from-to)680-695
Number of pages16
JournalInternational Journal of Production Research
Volume54
Issue number3
DOIs
StatePublished - Feb 1 2016
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Strategy and Management
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering

Keywords

  • US Postal Service (USPS) fleet management case
  • cutting planes
  • mixed-integer programming
  • optimization
  • parallel equipment replacement
  • technological change

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