Optimal replacement rules based on different information levels

Gert Heinrich and Uwe Jensen

Naval Research Logistics (NRL), 1992, vol. 39, issue 7, 937-955

Abstract: We consider the following replacement model in reliability theory. A technical system with random lifetime is replaced upon failure. Preventive replacements can be carried out before failure. The time for such a replacement depends on the observation of a random state parameter and is therefore in general a random time. Different costs for preventive and failure replacements are introduced which may depend on the age of the working system. The optimization criterion followed here to find an optimal replacement time is to minimize the total expected discounted costs. The optimal replacement policy depends on the observation of the state of the system. Results of the theory of stochastic processes are used to obtain the optimal strategy for different information levels. Several examples based on a two‐component parallel system with possibly dependent component lifetimes show how the optimal replacement policy depends on the different information levels and on the degree of dependence of the components. © 1992 John Wiley & Sons, Inc.

Date: 1992
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Citations: View citations in EconPapers (4)

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https://doi.org/10.1002/1520-6750(199212)39:73.0.CO;2-C

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Persistent link: https://EconPapers.repec.org/RePEc:wly:navres:v:39:y:1992:i:7:p:937-955

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