Abstract
In this paper ( n, N)-strategies are investigated for the maintenance of a two component series system. Vergin and Scriabin [8] provided some numerical evidence on the near-optimality of this type of policies. In a recent paper, Özekici [5] gave a characterization of the structure of the optimal policy and its possible deviations from the ( n, N)-structure for the discounted cost criterion. The same kind of structure is shown to hold for the average cost criterion. In view of the complicated form of the optimal policy and the near-optimality of the ( n, N)-policies we present a fast computational method to compute the average costs under a given ( n, N)-policy. This method is based on a well-known embedding technique. Moreover, a heuristic based on this computational method, is presented by which the optimal values of n and N can be determined.
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