Replacement models under additive damage

Dror Zuckerman

Naval Research Logistics Quarterly, 1977, vol. 24, issue 4, 549-558

Abstract: A production system which generates income is subject to random failure. Upon failure, the system is replaced by a new identical one and the replacement cycles are repeated indefinitely. In our breakdown model, shocks occur to the system in a Poisson stream. Each shock causes a random amount of damage, and these damages accumulate additively. The failure time depends on the accumulated damage in the system. The income from the system and the cost associated with a planned replacement depend on the accumulated damage in the system. An additional cost is incurred at each failure in service. We allow a controller to replace the system at any stopping time T before failure time. We will consider the problem of specifying a replacement rule that is optimal under the following criteria: maximum total long‐run average net income per unit time, and maximum total long‐run expected discounted net income. Our primary goal is to introduce conditions under which an optimal policy is a control limit policy and to investigate how the optimal policy can be obtained. Examples will be presented to illustrate computational procedures.

Date: 1977
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