Joint optimization of preventive replacement and order policy for single-unit systems

This paper proposes a joint preventive replacement and order policy for single-unit stochastic deteriorating systems. Orders with two delivery lead times are taken into account. The degradation process of the system is modeled by the Gamma process, and the degradation level is detected by sequential inspections or opportunistic inspections. Under the proposed policy, the order activities, the replacement activities, and the schedule of the next inspection are determined based on the detected system state. The formulas for calculating the average cost rate are derived by using the renewal process theorem. With the objective of minimizing the average cost rate, the grid method is used to optimize the proposed policy. In the numerical experiment, three types of inspection interval functions are investigated to validate the performance of the proposed order-replacement policy. Results show the outstanding performance of the proposed order-replacement policy.