CONCURRENT ENGINEERING: CONTEMPORARY ISSUES AND MODERN DESIGN TOOLS EDITED BY HAMID R. PARSAEJ AND WILLIAM G. SULLIVAN Chapman & Hall,London, 1993, xiii + 497 pp. ISBN 0-412-46510-8. List: $75.00.

In a recent paper, Jones and Zydiak [2] discuss the steady state fleet design problem, which has no natural initial distribution of vehicles. For this problem, they develop a new optimality criterion of minimizing annual equivalent cost per vehicle because the traditional optimally criterion of minimizing annual equivalent cost can lead to paradoxical results, as shown by example, when applied to the fleet design problem. In a subsequent note, Hartman [1] argues that this paradox is actually a result of a replacement convention that ignores opportunity costs. In this response, we demonstrate that paradoxical replacement behavior can occur with the traditional criterion even when opportunity costs are accounted for in the replacement analysis. We further conclude that the problems considered respectively by Jones and Zydiak [2] and Hartman [1] are fundamentally different in nature.     

A review of:“DATA ANALYSIS & DECISION MAKING WITH MICROSOFT EXCEL ” By CHRISTIAN S. ALBRIGHT,WAYNE L. WINSTON,CHRISTOPHER ZAPPE Duxbury Press,Pacific Grove,California, 2002, xii + 998 pp. + accompanying CD: ISBN 0-534-38932-5. List: $97·95.

The assumption of a positive marginal tax rate in each period over the life of an investment project does not properly characterize the tax position of a significant number of firms. The paper develops a lower bound on the present value of the tax shield from declining balance depreciation given a reasonable assumption about the stochastic nature of the period by period marginal tax rate. It turns out that the standard textbook formula is a reasonably good approximation of the true present value of the tax shield since our lower bound is very close to the textbook formula.