Technical Note—A Dual Machine Replacement Model: A Note on Planning Horizon Procedures for Machine Replacements

This note extends the work of S. Sethi and S. Chand, who considered a dual machine replacement model in an improving technological environment over time. The model covers cases in which the two machines are of different technology as measured by their investment and operating costs. Under fairly general conditions, we suggest a procedure to solve the infinite horizon problem and find the properties of the optimal solution. A numerical example illustrates the procedure.