In this paper, we consider the arithmetico-geometric process (AGP) repair model. Here, the system has two nonidentical component cold standby repairable system with one repairman. Under this study, component 1 has given priority in use. It is assumed that component 2 after repair is as good as new, whereas the component 1 follows AGP. Under these assumptions, by using AGP repair model, we present a replacement policy based on number of failures, [Formula: see text], of component 1 such that long-run expected reward per unit time is maximized. For this policy, system can be replaced when number of failure of the component 1 reaches to [Formula: see text]. Working time of the component 1 is AGP and it is stochastically decreasing whereas repair time of the component 1 is AGP which is stochastically increasing. The expression for long-run expected reward per unit time for a renewal cycle is derived and illustrated proposed policy with numerical examples by assuming Weibull distributed working time and repair time of the component 1. Also, proposed AGP repair model is compared with the geometric process repair model.