A Nonlinear Integral Model of Optimal Replacement Numerical Viewpoint

In this work, the numerical solution of a nonlinear Volterra integral equation with unknown function in both the integrand and the upper limit of integration is considered. Equations of this type mostly appear for finding the optimal policy of equipment replacement with attention to the technological progress in general and partial equilibrium. The optimal asset lifetime plays a key role in simulation of economical-technological development. As a special case, we restrict the model to a real case and construct a numerical algorithm for finding the optimal solution of replacement time based on the decomposition method. We also give some numerical experiments to illustrate a well known recent model, and make some comparisons as well.