Determine the Optimal Maintenance Policy

Model — @RISK Developer's Kit

A company has four possible maintenance policies for replacing manufacturing equipment. These policies range from never replacing machines to replacing all but the newest machines. This model will simulate each of these policies for 50 weeks to determine the policy that maximizes expected weekly profit.

Problem: Find the optimal machine replacement policy
Policy 1: Never replace a machine.
Policy 2: Immediately replace a "bad" machine.
Policy 3: Immediately replace a "bad" or "average" machine.
Policy 4: Immediately replace a "bad", "average", or "good" machine.

User Inputs	Value
Policy Duration (wk):
Machine Replacement Cost ($):
Profit from "Excellent" Machines ($):
Profit from "Good" Machines ($):
Profit from "Average" Machines ($):
Profit from "Poor" Machines ($):
Probability Matrix For Machine State
Present Machine State	Probability That Machine Begins Next Week As:
	Excellent	Good	Average	Bad
Excellent
Good
Average
Bad