The Age Replacement Problem

An age replacement policy requires that a unit be replaced when it attains a specified age, or at failure, whichever occurs first. The mathematical solution to the problem of what is the optimal age for replacement is well known. This paper adapts this general mathematical solution to the cases when a truncated normal, Gamma, or Weibull distribution can be assumed. Graphs are presented from which one can readily ascertain the optimal solutions for these models.