Age-replacement policy for items described by stochastic degradation with dependent increments

Ji Hwan Cha, Maxim Finkelstein, Gregory Levitin

Research output: Contribution to journalArticlepeer-review

5 Scopus citations


We consider a hybrid preventive maintenance policy. As in the classic model of age-replacement, a system is replaced either on failure or on reaching a predetermined age T. Additionally, it can be replaced on reaching a predetermined level of deterioration at some intermediate time in [0,T). We use a transformed gamma process with dependent increments to model the deterioration. A failure of an item occurs when this process reaches a predetermined deterministic level. We show that the proposed policy outperforms the classical one, that is, it achieves a lower value of the long-run cost rate. A detailed numerical illustration is presented and sensitivity analysis for the main parameters of the model is performed. The work in the paper makes an important contribution to maintenance modelling because dependent increments can better represent deterioration of a real system.

Original languageEnglish
Pages (from-to)273-287
Number of pages15
JournalIMA Journal of Management Mathematics
Issue number2
StatePublished - 1 Apr 2022

Bibliographical note

Publisher Copyright:
© 2021 The Author(s). Published by Oxford University Press on behalf of the Institute of Mathematics and its Applications. All rights reserved.


  • dependent increments
  • preventive maintenance
  • transformed gamma process


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