Introducing Optimization
Optimization is useful when the objective function being studied has two or more competing components: One of the components increases as the decision variable increases, whereas the other component decreases. Economic life, discussed in Chapter 11 and repeated in Figure 20.1, is an example of optimization of a cost function.
Figure 20.1. Economic life of an asset is an optimization problem
The decision variable is the length of time to keep the asset. The AE(i) cost of ownership (the CR(i)) decreases the longer the asset is kept, but the AE(i) cost of operation and maintenance increases. Over short ownership times, CR(i) ...
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