Optimal Spare Ordering Time for Preventive Replacement to Maximize the Cost Effectiveness

This article presents a model for determining the optimal spare ordering time for preventive replacement under the cost effectiveness criterion. The spare unit for replacement is available only by order and the lead-time for delivering the spare due to regular or expedited ordering follows general distributions. To analyze the ordering policy, the failure process is modelled by a non homogeneous Poisson process. By introducing the ordering, shortage, repair, replacement cost, and the salvage value, the expected long term cost effectiveness is derived as a criterion of optimality. It is shown that, under certain conditions, the optimum spare ordering time which maximizes the expected cost effectiveness is given by a unique solution of an equation. A special case of this model is also presented and discussed. Finally, a numerical example is given for illustration of the proposed model.