Optimal Time for Withdrawal of Voluntary Retirement Scheme with aTime –Varying Threshold

Voluntary retirement provides the incentive to the staff, who meet the certain criteria involved in the organization. If an organization feels that it is spending too much on the workforce and that it will still be able to obtain an effective output when the workforce is reduced, it will like to reduce its workforce strength by offering suitable incentives. Whenever there is an economic slowdown, organizations prefer to prune their staff strength as a cost cutting measure and offer voluntary retirement schemes to their personnel both in public sectors and private sectors. This paper considers such cases and the mean optimal withdrawal time for voluntary retirement scheme is determined when the reserve level of the organization's finances reaches a certain threshold level by means of the first-passage-time (FPT) distribution for the reserve to reach the threshold. This threshold level is considered to be varying with time, taking into account various factors like inflation, depreciation etc.