An Age Replacement Policy with Minimal Repair Cost Limit

A generalized replacement policy based both on the system age and the minimal repair cost limit is proposed. The system is replaced when it fails for the first time after age T. If it fails before age T, the repair cost is estimated and minimal repair is then undertaken if the estimated cost is less than a predetermined limit L; otherwise, the system is replaced. The mean cost rate is obtained, its behavior is examined, and ways of obtaining optimal T and L are explored.