Resource title

The Residual life of the renewal process: a simple algorithm

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We develop a simple algorithm for computing the distribution of the residual life when the renewal process is discrete. The algorithm does not require convolutions of the renewal process. We define the conditions under which the distribution converges and when it does not. We also investigate a well-known approximation for the mean and variance of the residual life widely used in inventory applications, based on the limit of the excess random variable as the number of renewals approaches infinity. We describe conditions under which the approximation can be used and when the algorithm is preferred

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en

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application/pdf

Resource resource URL

http://flora.insead.edu/fichiersti_wp/Inseadwp1995/95-02.pdf

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Copyright INSEAD. All rights reserved