Abstract
An extreme shock model when there is a change in the distribution of the magnitudes of shocks is defined and studied. Such a model is useful in practice since a sudden change in environmental conditions may cause a larger shock. In particular, the reliability and mean time to failure of the system is obtained by assuming that the times between arrivals of shocks follow phase-type distribution. The optimal replacement policy that is based on a control limit is also proposed. The results are illustrated when the number of shocks until the change point follows geometric distribution.
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