Parallel machine replacement under horizon uncertainty. Issue 1 (2nd January 2019)

• Record Type: Journal Article
• Authors: Seif, Javad; Shields, Brett A.; Yu, Andrew Junfang
• Is Part Of: Engineering economist. Volume 64:Issue 1(2019)
• Page Start: 1
• Page End: 23
• Publication Date: 2019-01-02
• Subjects: Engineering -- Estimates -- Periodicals; Industrial management -- Periodicals; 338.4762005
• DOI: 10.1080/0013791X.2018.1535012
• Languages: English
• ISSNs: 0013-791X

Abstract

Abstract: Construction projects usually get delayed for several time periods. When the planning horizon of a project is extended, projections for purchase and salvage of machinery within the planning horizon become inaccurate and less beneficial and often lead to unexpected costs. In this article, we formulate a parallel machine replacement (PMR) problem as a two-stage stochastic program with an uncertain planning horizon. We consider renting as an alternative to purchasing and maintaining the machinery. We show the application of the model through a case study in construction projects. Through numerical analysis, we derive managerial implications and show the value of the stochastic model.