Developing replacement policy

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A rental car company is developing a replacement policy for their cars over 4-year planning horizon. At the beginning of each year, the company must decide whether to replace a car or keep it in operation for another year. A car must be in service from 1 to 3 years. Below is the replacement cost as a function of the year the car was purchased and the number of years in operation. Develop a network model for a car replacement plan and solve it optimally using the appropriate network optimization algorithm. Replacement cost ($) for the number of years in operation Car purchased at the beginning of year 1 2 3 1 4000 5400 9800 2 4300 6200 8700 3 4800 7100 - 4 4900 - -

Reference no: EM131125863

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