On a new age‐replacement policy for items with observed stochastic degradation

A new methodology for preventive maintenance of degrading items is discussed. It combines the classical age‐replacement strategy when a system is replaced either on failure or on reaching the predetermined age, with replacement on reaching the predetermined level of deterioration at some intermediate time. Degradation of an item is modeled by the nonhomogeneous gamma process, whereas its failure occurs when this process reaches the predetermined deterministic level. It is shown that the proposed policy outperforms the classical one, i.e., it achieves the lower value of the corresponding long‐run cost rate. The detailed numerical illustration is presented, and the relevant sensitivity analysis for the main parameters of the model is performed.

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