A bivariate replacement policy for system in an increasing failure rate model with double repair cost limits

Abstract

This paper proposes a bivariate (T, L2) replacement policy with double repair-cost limits for a system subject to increasing failure rate model. External shocks are divided into two types: type-I shock and type-II shock. Each type-II shock makes the system suffer a minor failure, while each type-I shock increases the failure rate of the system by a certain amount and it will induce the system into critical failure. When a minor failure occurs, the repair cost is evaluated and minimal repair is executed if the repair cost is less than a single repair-cost limit L1 and the accumulated repair cost is less than a cumulative repair-cost limit L2, otherwise, the system is replaced by a new one. In addition, the system is replaced at scheduled time T or at critical failure. By formulating the optimisation problem, the optimal T* and L2* which minimise the long-run expected cost per unit time are found, respectively. We develop the corresponding computational algorithm to obtain the optimal replacement policy and present a numerical example to illustrate the effectiveness of the proposed model.