ABSTRACT
The paper presents a general stochastic model to analyze the life cycle cost of an engineering system that is affected by minor but repairable failures interrupting the operation and a major failure that would require the replacement or renewal of the failed system. It is commonly observed that the frequency of minor failures increases with aging of the system due to cumulative effect of operational wear and tear. At the same time, system’s vulnerability to major failures also increases with aging. The paper presents a composite stochastic process model in which the minor failures are modeled as a non-homogeneous Poisson process and the occurrences of major failure as a renewal process. The paper presents the derivation of the renewal equation for the expected cost. The age replacement policy is formulated to minimize the life cycle cost via a preventive replacement of the system.
