SENSITIVITY ANALYSIS OF TIME HORIZON FOR A CLASS EQUIPMENT REPLACEMENT PROBLEMS WITH STATIONARY PERTINENT DATA

This research article examined the effects of different planning horizons, with equipment replacement age fixed, in the Author’s Excel automated solutions to a class equipment replacement problems with stationary pertinent data. The investigation revealed that if the replacement age is fixed , and n1 and n2 are any two horizon lengths with n1 < n2, and P*j, g(j) are stage j optimal decision and reward from the template with horizon length n2, for j ∈ {n2 + 1 - n1, ..., n2} then P*j + n1 - n2 and g (j + n1 - n2) are the corresponding optimal decision and reward in stage j + n1 - n2 for the template with the horizon length n1.Moreover the corresponding optimal rewards are equal. The results were achieved by using the structure of feasible replacement time sets and appropriate dynamic programming reward recursions.