A model is presented with which two questions have been elaborated: \ud \ud 1. (a) what is the economic significance of improved health, permitting a longer herd life?\ud 2. (b) which cows should be removed from the herd during the first lactation in view of their milk yield?\ud This paper is confined to the first question; the second will be worked out in a subsequent paper.\ud \ud First, the principle underlying the replacement decision is discussed. Then, the basic data of the model are given. The age-associated probability of disposal has also been included in the model.\ud \ud A reduction of the involuntary replacement rate was found to be of major importance on the farm level. In the model a herd showing average production and an average herd life of 5.3 lactations will have approximately 20% more earned income each year than a similar herd with an average productive life of 3.3 lactations. However, the yield resulting from a longer herd life is subject to the law of diminishing returns.\ud \ud The economic importance of a long herd life appeared to be remarkably stable, i.e., hardly affected by: \ud \ud 1. (a) the average productive capacity of the herd as regards milk and/or meat;\ud 2. (b) the presence or absence of a moderate genetic improvement (1% per annum) in milk yield; or\ud 3. (c) changes in price ratios between milk and meat.\ud In every case, cows showing an average production, and which did not have to be removed because of disease, had an optimum calculated herd life of 10–14 lactations.\ud \ud Some further potential uses of the model are stated
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