Abstract
A number of studies on the problem of optimal timing for replacing the present equipment with new one, subjected to technical progress, have been reported. However, from a practical view point, that problem has not been well analyzed yet. In this paper, the problem in which technical improvements affect equipment acquisition costs and annual operating expenses was discussed. An attempt was made to develop several simple estimation methods for replacement timing and to propose a practical and really simple decision rule for practical use after analyzing that problem theoretically.
