Optimal replacement policy for condition-based maintenance with non-decreasing failure cost and costly inspection

Abstract

Purpose – The purpose of this paper is to determine optimal replacement threshold and optimal inspection interval for an item subjected to condition-based maintenance (CBM). The primarily assumption is that the item's failure replacement cost depends on the item's degradation state at which failure occurs and/or the time the item fails. The cost of inspection is also taken into account. Design/methodology/approach – The control limit replacement policy framework, already reported by some research referred to in this paper, is first extended to include the non-decreasing failure replacement cost assumption. Then, for alternative inspection intervals, replacement thresholds together with their associated total cost including the inspection cost are computed. By comparing the total costs, the optimal inspection interval and its corresponding optimal replacement threshold are simultaneously identified. Findings – The mathematical formulation required for the determination of optimal replacement threshold and optimal inspection interval for an item subjected to CBM under the assumption of non-decreasing failure cost is provided. Practical implications – In some practical situations where CBM is implemented, the failure replacement cost may depend on the time the failure happens and/or may depend on the system's degradation state. In addition, inspections often incur cost. Under such circumstances, findings of this paper can be utilized for the determination of optimal replacement threshold and optimal inspection interval for the underlying system. Originality/value – Using the approach proposed in this paper, one could obtain the optimal replacement threshold and the optimal inspection interval for a system subjected to CBM.