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Titolo:
Cycles optimization: The equivalent annuity and the NPV approaches
Autore:
Luciano, E; Peccati, L;
Indirizzi:
Univ Turin, Dipartimento Stat & Matemat Applicata, I-10121 Turin, Italy Univ Turin Turin Italy I-10121 & Matemat Applicata, I-10121 Turin, Italy
Titolo Testata:
INTERNATIONAL JOURNAL OF PRODUCTION ECONOMICS
fascicolo: 1, volume: 69, anno: 2001,
pagine: 65 - 83
SICI:
0925-5273(20010107)69:1<65:COTEAA>2.0.ZU;2-6
Fonte:
ISI
Lingua:
ENG
Keywords:
net present value; equivalent annuity; plant renewal;
Tipo documento:
Article
Natura:
Periodico
Settore Disciplinare:
Engineering, Computing & Technology
Citazioni:
13
Recensione:
Indirizzi per estratti:
Indirizzo: Luciano, E Univ Turin, Dipartimento Stat & Matemat Applicata, Piazzza Arbarello 8, I-10121 Turin, Italy Univ Turin Piazzza Arbarello 8 Turin Italy I-10121 urin, Italy
Citazione:
E. Luciano e L. Peccati, "Cycles optimization: The equivalent annuity and the NPV approaches", INT J PRO E, 69(1), 2001, pp. 65-83

Abstract

The paper discusses the use of a generalized version of the equivalent annuity principle, which takes into account interest rate fluctuations over time. When dealing with applications over a sequence of cycles, e.g. plant replacement ones, the equivalent annuity is usually defined with reference toeach single cycle or to the whole sequence. First, we study the correspondence between net present values and equivalent annuities as defined above in optimization problems. We show that only the second definition is appropriate for optimization, whenever the length of the cycle is a choice variable. However, also the second is not necessarily correct, when the horizon isfinite. Then, we discuss the corresponding problems of optimality, both with an infinite and a finite sequence of cycles. Applications to a simple plant replacement problem are illustrated: they show how different the optimal decisions can be from the equivalent annuity ones. (C) 2001 Elsevier Science B.V. All rights reserved.

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Documento generato il 03/04/20 alle ore 11:07:20