Improving productivity of a logistics filed requires a stable and economical operation of material handling equipment. Such an effort involves at its first priority removing an operational uncertainty associated with the failure of equipment and the s...
Improving productivity of a logistics filed requires a stable and economical operation of material handling equipment. Such an effort involves at its first priority removing an operational uncertainty associated with the failure of equipment and the subsequent loss accruing from the shutdown in the EOS(End of Service) operation. Because the maintenance schedule and also the equipment replacement timing are intimately intertwined strategic factors in the logistics operation, this paper attempts to examine the issue of the material handling equipment embedded with the failure uncertainty by explicitly considering such factors as the opportunity of maintenance, optimal replacement time, cash flow, EOS and VaR. We design a model with cash flow and suggest an optimal replacement time by numerical examples.