Opportunity-based age replacement with a one-cycle criterion

P Coolen-Schrijner, S C Shaw () and F P A Coolen
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P Coolen-Schrijner: Durham University
S C Shaw: University of Bath
F P A Coolen: Durham University

Journal of the Operational Research Society, 2009, vol. 60, issue 10, 1428-1438

Abstract: Abstract In this paper age replacement (AR) and opportunity-based age replacement (OAR) for a unit are considered, based on a one-cycle criterion, both for a known and unknown lifetime distribution. In the literature, AR and OAR strategies are mostly based on a renewal criterion, but in particular when the lifetime distribution is not known and data of the process are used to update the lifetime distribution, the renewal criterion is less appropriate and the one-cycle criterion becomes an attractive alternative. Conditions are determined for the existence of an optimal replacement age T * in an AR model and optimal threshold age T opp * in an OAR model, using a one-cycle criterion and a known lifetime distribution. In the optimal threshold age T opp *, the corresponding minimal expected costs per unit time are equal to the expected costs per unit time in an AR model. It is also shown that for a lifetime distribution with increasing hazard rate, the optimal threshold age is smaller than the optimal replacement age. For unknown lifetime distribution, AR and OAR strategies are considered within a nonparametric predictive inferential (NPI) framework. The relationship between the NPI-based expected costs per unit time in an OAR model and those in an AR model is investigated. A small simulation study is presented to illustrate this NPI approach.

Keywords: age replacement; opportunity-based age replacement; one-cycle criterion; nonparametric predictive inference (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (9)

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DOI: 10.1057/jors.2008.99

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