Comparison of Replacement Strategies for Items that Fail

Replacement strategies applicable to items which fail with monotonically increasing failure rate are considered. In particular, the important characteristics of n-stage and 1-stage strategies are compared. This study, though somewhat tutorial in nature, reveals interesting properties which are useful in selecting an appropriate strategy. In general, n-stage strategy has economic advantage over the corresponding 1-stage strategy. The advantage is obtained by transferring failures from stages where failure costs are high to stages where these costs are low. In many cases, a quick examination of the system will reveal whether n-stage strategy will be advantageous or not. Subsequently, based on a detailed study an appropriate n-stage strategy can be designed. The more stages the greater would be the economy, up to where practical considerations and increasing transfer costs will limit the number of stages.