Question: In the VanBuren machine replacement problem, the companys current policy is to keep a machine at least four quarters but no more than 12 quarters.

In the VanBuren machine replacement problem, the company’s current policy is to keep a machine at least four quarters but no more than 12 quarters. Suppose instead that the company imposes no upper limit on how long it will keep a machine; its only policy requirement is that a machine must be kept at least four quarters. Modify the spreadsheet model appropriately. Is the new optimal solution the same as before?

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Machine replacement model shortest path formulation Inputs Purchase cost 3530 Maintenance cost In first quarter 100 Increase per quarter 65 Salvage value After one quarter 1530 Decrease per quarter 11... View full answer

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