I. Introduction
Traditional reliability theories mainly concentrate on the binary-state reliability modeling, in which the system and each component are assumed to be either in the working state or in the failure state. In most reliability studies based on the performance degradation, researchers were devoted to the derivation of the lifetime distribution when the reliability is defined as , where is modeled by a stochastic process and is a critical threshold level. However, such a binary-state reliability definition is inapplicable for many real-world components or systems, which have a range of levels of performance [1]. The levels vary from the perfect functioning to complete failure, which means that there are some partial working states or partial failure states. For example, the power of a solar cell may degrade below a certain threshold with time, but it can still serve the solar module within its residual ability. The extent of the wear caused by the aging degradation process in a bearing shell may extend up to a critical alarm threshold, but it can still work at some danger levels.