Determination of Optimal Replacement Time for Combines Harvester John Deere 955 under Uncertainty Condition, by Using Stochastic Dynamic Progmming

Efficiency and performance of agricultural machinery, including combine is quantity and quality of work per hour or per hectare of harvest. The combine grows older there is a tendency for economic efficiency and performance to decrease. So, there is no economical performance to use that anymore and it must be replaced with a new combine. The decision to replace an item of farm machinery can be made because of cost minimization, reliability, new technology, need for capacity, obsolescence, wear and tear. Therefore the optimal replacement time for combine in order to increase its performance is one of the most important objects of combine management. The decision to replace an item of farm machinery can be made because of cost minimization, reliability, new technology, need for capacity, obsolescence, wear and tear; and has a vital role in machinery management. In other words, most capital goods have an optimal lifespan and replacing machinery at a less or more than optimal age could significantly affect profitability. According to this study aims to investigate the optimal replacement time for combine harvester in Fars province. To this end, introduces stochastic elements into the models to show if uncertainty about future costs affects the replacement decision. Thus, a decision tree was drowning for each three year of life and it was then analyzed using stochastic dynamic programming. By a stratified random sampling method, 160 John Deere 955 combine which is dominant combine in Fars province were chosen for interview to collect the technical and economic data and other needed information. The results indicated that, the most appropriate time of replacement under uncertainty condition about future cost for the combine was 17th year of its life.