The Repairman Problem Revisited

Crampes, Claude and Renault, Jérôme (2016) The Repairman Problem Revisited. The Annals of Economics and Statistics, 122. pp. 7-24.

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Official URL: http://tse-fr.eu/pub/30725

Abstract

We use a probabilistic model to show that the development of a large number of small production units facing independent risks of failure must be accompanied by an approximately proportional increase in the number of repairmen. We derive the cost function of a machine in working condition, which increases with the cost of an installed machine and with the repair cost and failure probability, and decreases with repairman efficiency. We provide a very simple proof and generalize the results of Arrow et al. (1972). We also show that it is redundant to require installers to hire the number of repairmen necessary to reach a fixed availability level for each installed machine.

Item Type: Article
Language: English
Date: June 2016
Refereed: Yes
JEL codes: C61 - Optimization Techniques; Programming Models; Dynamic Analysis
D24 - Production; Cost; Capital and Total Factor Productivity; Capacity
J3 - Wages, Compensation, and Labor Costs
O33 - Technological Change - Choices and Consequences; Diffusion Processes
Subjects: B- ECONOMIE ET FINANCE
Divisions: Toulouse School of Economics - TSE
Site: UT1
Date Deposited: 09 Sep 2016 07:58
Last Modified: 18 Oct 2017 15:11
OAI ID: oai:tse-fr.eu:30725
URI: http://publications.ut-capitole.fr/id/eprint/22352

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