Date of Award
12-1995
Degree Name
Master of Science
Department
Industrial and Entrepreneurial Engineering and Engineering Management
Department
Industrial and Manufacturing Engineering
First Advisor
Dr. Franklin K. Wolf
Second Advisor
Dr. Bob White
Third Advisor
Dr. Richard Munsterman
Access Setting
Masters Thesis-Open Access
Abstract
The study determined if accuracy of estimation of retirement price of industrial equipment was affected by using a cumulative average pricing (CAP) method at varying conditions of inflation rate, service life, and life characteristics. The study also determined the accuracy of estimating the average life of unaged data by simulated plant record (SPR) method. Thirty-six experiments were conducted at varying conditions of inflation rate, curve type and average life. The study was conducted for two left modal curves, two symmetrical modal curves and two right modal curves at 20 and 40 years average life using three different inflation rates: 3%, 6%, and 9%.
The findings indicated that there is significant error in calculating the retirement price using CAP at high inflation rates. The SPR method can be used to approximate the life characteristics and average life of unaged data.
It was concluded that CAP method may be used to estimate the retirement price of unaged data when the inflation rate is less than 3%.
Recommended Citation
Hosangadi, Mahendra Babu, "Cumulative Average Pricing Method for Estimating Average Service Life" (1995). Masters Theses. 4060.
https://scholarworks.wmich.edu/masters_theses/4060