Dabo neede to detcraise tihe cptional replaca tnat a Satage Vale() 艮00 6OO 500 Is, 500 4. 000 50,000 ,000 0.000 5000 doo 5
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Expert Answer
Optimization model is as follows
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C stands for current machine and From C to 0 implies that current machine is replaced now.
Formula: L12 =SUMIF($A$12:$A$25,K12,$I$12:$I$25)-SUMIF($B$12:$B$25,K12,$I$12:$I$25) copy to L12:L17
M20 =SUMPRODUCT(H12:H25,I12:I25)
Optimal decision: Binary values (Flow) indicate that the best decision is to replace the current machine now with a new machine and keep the new machine for 3 years, before again replacing it with a new machine.
Total value of this decision strategy = $ 10,800