Optimal Machine Replacement Strategies Using Dynamic Programming Recursions: A Case Study of NASCO Household Products Ltd., Jos

Abstract

This study investigated the economic value that may accrue to the industrial system due to machine replacement decisions with respect to packing machines at Nasco Household Products Limited, Jos. A questionnaire and direct observation methods were used to obtain data for the study and the data collected were interrogated to determine their reliability. Using the verified pertinent data, the investigation obtained optimal replacement strategies which revealed that the machine should be replaced based on the age transition diagrams from the solution yield of the machine replacement optimization problem. The results were achieved using the established structure of the sets of feasible machine ages corresponding to the various decision periods, in machine replacement problems, which eliminated the need for cumbersome network diagrams for the dynamic recursions. The dynamic programming recursions were found to be inherently manually computationally intensive and so did not lend themselves to sensitivity analyses of the problem parameters.