What is concerned with the prediction of replacement costs and determination of the most economic replacement policy ?

Solution (By Examveda Team)

Theory of replacement is concerned with the prediction of replacement costs and determination of the most economic replacement policy. The Replacement Theory in Operations Research is used in the decision making process of replacing a used equipment with a substitute; mostly a new equipment of better usage. The replacement might be necessary due to the deteriorating property or failure or breakdown of particular equipment.