Optimal Replacement of Damaged Devices.

Abstract : Suppose that a device is subject to a sequence of shocks occurring randomly at times n = 1, 2,..., according to a Poisson distribution. Shocks cause damage and damages accumulate additively. The device can be replaced before or at failure. The cost of replacement before failure depends on the cumulative damage at replacement time. Cost of replacement at failure is assumed to be a constant. In this paper we derive the optimal replacement policy for such devices using the long run average cost criterion. (Author)