Optimum ordering policy for preventive age replacement

Abstract

Most of the spare ordering policies treated up to now have assumed that preventive and corrective replacement costs are equal, which implies in essential that there is no significant need for preventive replacement. This paper presents an ordering policy for preventive age replacement with minimal repair. Introducing the replacement, repair, inventory holding and shortage costs, the expected cost rate is derived. A procedure to determine jointly the ordering time for a spare and the preventive replacement time for the operating unit so as to minimize the expected cost rate is proposed. To explain the ordering policy and the optimization procedure, a numerical example is also included.