APPLICATION OF CONTINUOUS CASH FLOW STREAMS IN THE FIELD OF RELIABILITY ENGINEERING USING LAPLACE TRANSFORM

Abstract

It is suggested that economic problems with stochastic character can be easily solved if the cost variables, which are stochastic in nature, have as their source the stochastic character of the failure. The economical aspects of reliability and the knowledge of reliability engineering in applied economic are of much more importance than it is devoted in literature. This paper presents some examples of this issue. In the first part, the present value computation technique using transform technique is outlined, which, is rarely applied in economics analysis. The second part shortly summarises the most important theorems of reliability engineering. Finally, in the main part, a cost model is presented which can be used to address stochastic economic problems, where sources of stochastism are failure processes.