Planned Replacement: Some Theory and

its Application
GERALD J. GLASSER
New York University, New York, N. Y.
Two basic methods of planning replacements in a program of preventive maintenance are de-
scribed: (1) age replacement and (2) block replacement. The objective is to provide an introduction
to some of the basic concepts of probability theory as they can be applied to problems of preven-
tive maintenance-an area of statistical application that has become known as replacement theory.
In troduction
TO> EPLACEMENT theory is one important portion of
~ the statistical theory of reliability, an area of
growing interest and concern to management. In a
broad sense, it deals with the efficient utilization of
equipment known to be subject to some risk of fail-
ure.
More precisely, preventive maintenance, in the
terminology employed in this paper, refers to the
planned replacement of pieces of equipment or parts
(such as light bulbs, electronic components, genera-
tors, or missile parts) that may fail in operation un-
less a replacement is made in time. The problem of
planning replacements is complicated by the fact
that the exact time at which the equipment or parts
will fail is uncertain, and must be described in terms
of probabilities. Despite this uncertainty, in many
problem situations the failure of a unit during actual
operation is costly, and may otherwise be disadvan-
tageous. If, as is usually the case, the risk (proba-
bility) of failure of a unit increases with time and
use, then planned replacement is warranted after
some period of usc. Of course, replacement can not
be made too frequently, or operating costs outweigh
the gains that accrue from the prevention of failures.
In essence, the approach towards preventive main-
tenance described in this paper involves the same
two steps as are involved in any problem subject.ed
to the quantitative approach: (1) development of a
mathematical model to describe a problem situation
and (2) solution of the mathematical model to pro-
vide the answer to the problem situation. It is to be
Dr. Glasser is Professor of Business Statistics at the
Schools of Business.
Journal of Quality Technology 110
stressed that every problem situation, in practice, is
at least somewhat different from every other problem
situation. Hence, the material in this paper is best
viewed as illustrative of an approach, and not as
providing specific solutions to be automatically
adopted without adaptation, to any problem that
one faces.
The particular mathematical models that we con-
sider in this paper assume no deterioration in equip-
ment, up to the time it fails. It is, of course, possible
to construct models that take into account deteriora-
tion, and the economic consequences of it. Here
however, we restrict the survey to replacement of
equipment that is in either of two states: it is operat-
ing normally, or it has failed.
The construction of a mathematical model for any
problem in planned replacement involves two phases,
as follows:
(1) Description of the pattern of failures of the
equipment or parts over time, in terms of a proba-
bility distribution. Some failure distributions useful
in replacement theory arc discussed below; by name,
they are called the exponential, the Weibull. the
gamma, and the truncated normal distributions.
(2) Development of an equation that describes
the :wemge or "expected" cost of following a particu-
lar policy of planned replacement. In a sense, the
actual cost of any policy of planned replacement will
vary from period to period, depending on the number
of failures that occur prior to replacement. There-
fore, to evaluate any given policy we must consider
the average cost per period (or per unit of time) over
an indefinitely long period of time. This average is,
in a mathematical sense, simply the "expected" cost
Vol. 1, No.2, April 1969
PLANNED REPLACEMENT: SOME THEORY AND ITS APPLICATION 111
of following a particular policy of planned replace-
ment.
Given a distribution of failures and a cost equation,
which together describe a problem in preventive
maintenance mathematically, the determination of
an optimal policy of planned replacement requires
only some mathematical manipulation, or calcula-
tion, or both, to ascertain the particular policy that
minimizes costs, at least over the long run. Examples
appear below.
In subsequent sections we review some properties
of failure distributions and discuss the solution to the
two standard replacement models already mentioned:
the age replacement model and the block replace-
ment model. More complicated replacement prob-
lems are also described. In conclusion, a brief bibliog-
raphy of books and articles is presented for readers
who are interested in exploring the statistical theory
of planned replacement more fully.
Failure Distributions
As was indicated above, the construction of a
mathematical model for any problem in planned re-
placement requires, as a first step, description of
the pattern of time-to-failure of equipment under
study in terms of a probability distribution. The basis
for the construction of this type of "failure distribu-
tion" must eithcr bc some empirical evidence in the
form of historical data, or judgment, or some com-
bination of both. Hen' we briefly review some basic
ideas involved in the eOIll'truction and lise of failure
distributions.
Elllpirical Distrihutions
If there are available data on1illl('s tofailuf"(' IllId
they are very plentiful, one may eOllst.met :I pr()ba-
bility distribution directly from tIlP datil silliply by
calculating the relative frequency \\"ith whieh tlw
equipment under study has failed aft('r :-;() lllallY
hours of use. In this case, the probability distribution
as derived shows, directly, the proportioll or times
that the equipment under study had failed after t
hours of use, for a series of values of t. An example of
a probability distribution constructed in this manner
appears in Table 1. This distribution is based on the
operating records of 3215 commercial aircraft radio
tubes of a certain kind. (Actual observed data are
altered.) The probability of failure in the interval O.
to 249.9 hours is shown as 0.309. This reflects the
fact that 992 of the 3215 observed tubes were re-
corded as having failed at less than 250. hours. The
other figures in the second column are similarly de-
TABLE 1. Probability Distribution of Failures of a
Certain Type of Commercial Aircraft Radio Tube
Time interval (in hours)
Probability of failure Cumulative prob-
in interval ability of failure
0.-249.9 .3086 .3086
250.-499.9 .1963 .5048
500.-749.9 .1816 .6865
750.-999.9 .1135 .8000
1000.-1249.9 .0781 .8781
1250.-1499.9 .0579 .9359
1500.-1749.9 .0373 .9733
1750.-1999.9 .0156 .9888
2000.-2999.9 .0078 .9966
3000. and over .0034 1.0000
Note: Observed data are somewhat altered.
rived, from the records. The last column is merely a
cumulation of the probabilities in the second column.
Mathelllatical Distributions
Discrete probability distributions derived directly
from data are not always simple to work with in con-
nection with the application of replacement theory.
Furthermore, there are not always sufficient data to
estimate the probabilities of failure in the various
time intervals with sufficient precision, and there
may be other problems in the collection of data. An
alternative approach to the task of describing the
pattern of time-to-failure, common in all such ap-
plications of probability theory, involves assuming a
mathematical function to describe the probability
distribution of failures, and then to estimate the
parameters of the aSimmed fUliction. The assumption
of such a function often :-;implific8 the mathematical
analysis ill tlw application of replacement theory,
:lnd :lbo offers :-;tatiHtieal advantages in simplifying
t 1 1 ( ~ taHk of eolleetion of data.
Tlwre arc a variety of mathematical functions
which might be used, in anyone problem situation.
to describe a probability distribution of failures.
Different functions have different properties, and in
anyone problem situation the analyst wants to
choose that function with properties which most
closely resemble what he knows about the situation
under study.
Probability Concepts
Most of the mathematical functions used in con-
nection with replacement theory are continuous
rather than discrete functions. Let f( t) denote, in
general, such a function, so that the probability of a
failure between time t and time t + dt is f( t) dt.
Another important concept is the cumulative proba-
112 GERAlD J. GlASSER
bility of failure from time 0 through time t which is,
by definition,
t
F(t) = 1 J(x) dx
In addition, the function
h(t) = J(t)/{l - F(t)}
is also of great significance in statistical analysis of
reliability and replacement theory. This is the so-
called hazard function, which measures the condi-
tional risk of failure. That is, h (t) dt is the probability
of a failure between time t and time t + dt given
that a unit has survived through time t. Preventive
maintenance is feasible for equipment for which
h( t) increases as t is, for equipment
for which the rate of failure increases the more it is
used.
The Exponential Distribution
One mathematical function that is widely used in
some kinds of statistical analysis of reliability is the
exponential distribution, given by the expression
J(t) = ae-"t
where a is the parameter of the distribution. As is
easily shown for this distribution, h(t) = a, a con-
stant independent of t. This means that function is
appropriate as a failure distribution for parts and
equipment that show a constant hazard of failure,
independent of age. Statistical studies have shown
that many electronic parts have such a character-
i::;tie . in these cases, there is essentially no difference
ill t hp ri"k of failure between a relatively new part
and all older, used part. Preventive maintenance is
!lOt, aL all approp!'iate for parts or equipment that
exhibiL :l (:onsLant ri"k of failure. It is uneconomic to
replace llI-wd part" with new ones because the new
ones have jusL as mll(:h risk of failure associated with
them. Hence, tl}() ('xpolH'nLial distribution is not use-
ful in problem::; in \"hieh planned replacement is
appropriate.
Alternative Distributions
Three mathematical functions whieh 1'1'<'-
quently useful as failure distributions in n:plae:PIllPnt
theory are the Weibull, truncated 1I01'lWtl alld
gamma distributions. AU three may be used, ullcie'r
appropriate conditions, to describe parts for which
the risk of failure increases with time or use. It is in
this circumstance that planned replacement is, in
fact, appropriate.
fill
0.\ 1.0 1.\ 20
values of crt
CHART 1. Weibull Distributions with Different Shape
Parameters (3.
For purposes of exposition in this paper we shall
refer only to the Weibull distribution, and use only
it for illustrative purposes in discussing replacement
models. Of course, in any particular pmblem either
the truncated normal or the gamma or some other
distribution may be more appropriate.
The Weibull Distribution
The Weibull distribution is described by the fol-
lowing expression for the density function,
J(t) =
where a and (3 are the parameters of the distribution.
The cumulative distribution function is
t
F(t) = 1 J(x) dx = 1 -
As it is written here the W eibull distribution ranges
from 0 upward, as seems appropriate for most failure
situations. The parameter a is a scale parameter,
while (3 is a shape parameter. Chart 1 shows the
shapes of Weibull distributions having {3 = 1, 2, 3,
and fl. When {3 = 1 the Weibull distribution reduces,
in this special case, to the exponential distribution.
WIl(:n (3 > 1 the risk of failure (hazard function) of
the Wei bull distribution increases as t increases. The
hazard function is, in fact,
h(t) = a{3(at)f3-
1
PLANNED REPLACEMENT: SOME THEORY AND ITS APPLICATION 113
till
3000 6000 9aoo 120DD 11000 18JUD
t (hours)
CHART 2. Weibull Distribution for Time-to-Failure
of an Electronic Tube. Mean Failure Time of 8970
Hours and Standard Deviation of 2990 Hours.
The mean time-to-failure of a part (average service
life) when one assumes a Weibull distribution can be
expressed as a function of the two parameters a
and (3. If we denote this mean by the symbol E (t) ,
we have
E(t) = ! r(I + I/(3)
a
where r ( ) stands for the complete gamma func-
tion. (See reference [6].)
When one assumes a Weibull distribution in a
problem situation, one must then estimate a and (3
from data, or judgment, or both. There are various
statistical methods for estimation, depending on how
the data are collected. Discussion of these methods
is peripheral to the main topic of paper. 11('1'8,
only an example of the Wei hull di:;trii>utioll giWll.
Chart 2 shows f(t) fOJ' :1 W('ilmll diHt.riilut.ioll wit.h
a = 0.000100 and (3 = :3,;)() t.o U\(! tillll!-t.O-
failure of an electronic tube. TIl<! Ill('all t.illH'-t.o-
failure of the tube is 8970 ho\ll's and t.he
deviation of these failure For
this particular value of {3 the W ('ilmll dit:>tl'ibutioll
appears nearly symmetrical and ailllo:-;t "normal."
For other values of (3, hmvever, the diHtl'ibution may
skew to the left, or to the right, amI be flatter or
more peaked than the normal curve.
The Age Replacelllent Model
Nature of the Policy
The first of the two basic models of replacement
theory that we consider is the age replacement model.
An age replacement policy specifies that if a unit
survives to a specified age it is replaced, with the ad-
ditional provision that if a unit fails prior to attain-
ing that specified age it is immediately replaced and
the new unit is scheduled for replacement according
to the same rules.
The use of age replacement is logical if the cost of
replacement before failure effects some saving. This
would indicate that there is an additional cost to a
failure during operation over and above the cost of a
new unit. The question posed by the use of a policy
of age replacement is "at what age should units be
replaced to minimize cost per unit of time of utiliza-
tion?"
The use of age replacement, as defined above, re-
quires that one maintain records of the age of each
unit in operation, and also that one maintain con-
tinuous surveillance to detect any failures that may
occur prior to planned replacement, Age replacement
implies, as do all replacement models, that the risk
of failure of a unit increases with age and that it may,
therefore, be logical to replace a unit after a point
despite the fact that it is still functioning,
Cost Considerations
Two costs are pertinent in the age replacement
model: (1) the per unit cost of replacement after
failure (to be denoted by c
a
) and (2) the per unit
cost of replacement before failure (to be denoted by
Cb). Age replacement is meaningful ollly if Ca > Cb
Also, denote the cost ratio k = r,./I'I) , where k > 1
because Ca > Cb
The expccted cost 01' operatioll pCI' unit of time
from using a policy oj' l'I'placing a unit at failure or
at t.illll' t, whicl\('v('r oeelil's first, is developed as fol-
I()\\'H. FirHtly, till! ('xpected cost per unit is
e(t) = Ca l f(x) clx + Cb {'" f(x) clx
= C
a
F(t) + cdi - F(t)}
The first term in this formula is tne cost of replace-
ment after failure times the probability a unit fails
prior to time tj the second term is the cost of replace-
ment before failure times the probability a unit does
not fail prior to time t.
Secondly, the expected usage per unit is
T(t) = l xf(x) clx + t f' f(x) clx
= G(t) + tIl - F(t)}
where the symbol G(t) is introduced to stand for the
114 GERALD J. GLASSER
partial expectation over the range 0 ~ x ~ t. This
expression merely represents the totality of each
possible time-to-failure, or time-to-replacement,
multiplied by its probability of occurrence.
The ratio R(t) = C(t)IT(t) measures the ef-
fectiveness of an age replacement policy over an un-
limited time span, because it represents the long-run
average cost per unit of time of utilization. The prob-
lem is to choose an age replacement policy (that is,
choose t) so as to minimize R (t), or maximize
lIR(t) which measures the long-run average time of
utilization per unit of cost.
Mathelllatical Results
The minimization of R (t) can be accomplished by
trial and error computations, once one assumes a
failure distribution and the two costs. Some mathe-
matical analysis does, however, simplify the compu-
tational requirements considerably. First of all, it can
be shown that if the hazard function, h(t), which was
defined earlier, increases as t increases then R (t)
must have one of the two forms depicted in Chart 3.
That is, under this condition, which is the condition
under which preventive maintenance is feasible,
R(t) must either (a) decrease continuously as t in-
creases or (b) decrease to some unique minimum and
then increase. In the first case, the optimal replace-
ment interval is t = 00, which means, in effect, re-
place only at failure and not before, in order to mini-
mize costs. In the second case, there is an optimal
finite replacement interval, say t = t*, which mini-
mizes costs and which, as noted earlier, can be found
by some sort of systematic trial and error computa-
tion.
Hill
\al
Ibl
lime It)
CHART 3. Two Possible Forms of R(t) for the Age Re-
placement Problem if h(t) Increases with (3.
Efficiency of Age Replacelllent
What are the savings that accrue from following
an age replacement policy? This q1.j.estion can be
answered in the following manner. It can be shown
that the cost ratio from following the optimal age re-
placement policy is
R(t) = ( ~ - ~ ) h ( t )
while the cost per unit of time of replacing only at
failure is cal E(t) where, as before, E(t) is the average
service life of the component under study. Therefore,
we may measure the relative efficiency of an optimal
age replacement policy by the standardized cost
ratio
p(t*) = R(t*) E(t)/c
a
Clearly p( t*) must be sufficiently below 100 percent
to make age replacement, and the administrative
cost associated with it, worthwhile.
A computer program can be written to find an
optimal age replacement policy and also the cost re-
duction associated with that policy. Input to such a
program must consist of the two costs, Ca and Cb
(or at least the ratio k = cal Cb), choice of failure
distribution, and (estimates of) the parameters of
that distribution. The formula for R (t), if one as-
sumes a Wei bull distribution, is
-(at)p + (1 -(aO
P
)
Rw(t) = Cbe t C
a
- e
1 e-(ax)P dx
This function always behaves as curve (b) does in
Chart 3 irrespective of the values of its parameters
a and {3 (except that (3 > 1); that is, as t increases,
Rw(t) for the Weibull distribution, decreases to a
unique minimum and then increases. The value of
t = t* for which this function attains its minimum
may be computed by a Newton-Raphson iterative
procedure, or by some less sophisticated numerical
method. Of course, a computer program greatly
facilitates the work.
This paper provides a chart which obviates the
need for such computations in certain cases. Chart 4
shows optimal age replacement policy when one is
dealing with a unit whose time-to-failure can be ade-
quately described by the Wei bull distribution. In
order to use this chart one must have the value of
k = cal Cb and the ratio of the mean to the standard
dcvation of the failure distribution (this ratio, de-
noted by t', is the average service life of the com-
ponent in standard deviation units). For values of
k and v the chart shows the value of t* in standard
PLANNED REPLACEMENT: SOME THEORY AND ITS APPLICATION
115
..
Q
<.>
'uu
50
L'
'u
5
.
1
-1,0 -1,5
;-L'
I

'H r\-,
I
,



,
, I
cL,
l-"c
,'\.- .

I-i-,
I

-, ,0
(z)
-,,0
I
I'
'tt
I jill
I I

,(H'

fi
,I
,'Ii '\ II
..""
1
i
-3
1
5 -4
j
O -4.5 -5.0
I
I
1 '
11
I,
I
i
I' I
I
,II
I
I,
1
rIG , 1.+
[t
,
I
,
: I
,II i
10
II
I
"
'I
I
25 50
"
I
I
I
I
M
a'
I
,
I
I
II
100
05
10
20
35
50
75
90
(p I
Average service life in standard deviation units (v)
CHART 4. Optimal Policies Under Age Replacement: Weibull Distribution.
deviation units away from the mean, to be denoted
as z*. Thus, after reading z* from the chart one must
calculate
t* = E(t) + z*u(t)
where E(t) is the mean time-to-failure (average
service life) and u(t) is the standard deviation of
failure times for the unit under study.
The preparation of Chart 4 has involved sdting;
the derivative of Rw(t) with respect to t equal to 0
and then calculating and plotting tho:;c :-let:; of values
of k, v and t* which satisfy this equation. The pro-
cedure is elaborated on in reference [8J.
The chart also has traced out on it some values of
the standardized cost ratio, pw(t*) = Rw(t*) E(t)/
Ca , that occurs when one follows the optimal policy
indicated by the chart.
Example
For an example, consider an electronic tube
say, in commercial airline communication equip-
ment. Suppose that k is detpl'mined to be 11, that a
Weibull distribution call be a:-l:-;umed to describe fail-
ures reasonably, that the mean failure time is 8970
hours, that tlw deviation is 2990 hours and,
hence, that the average service life in standard devia-
tion llllit:-l i:-; I' = 8970/2900 = 3.00. Chart 4 shows
that Uw optimal age replacement policy has z* =
-1.70 so that
t* = 8970 - (1.70) (2990) = 3887 hours.
The optimal age replacement policy is to replace each
tube after 3887 hours of use, or at failure, whichever
occurs first. Interpolation in the chart also shows
that pw(t*) = 0.30 which means an age replacement
policy incurs costs of operation only 30 percent of
those that would be incurred by a maintenance sys-
tem that called for replacement only at failure.
The Block ReplaceIllen t Model
Nature of the Policy
The second basic model of replacement theory
that we consider is called the block replacement
116 GERALD J. GLASSER
model. The name is suggestive of the fact that this
model is most appropriate in situations in which pre-
ventive maintenance is being applied to a group of
units, rather than to a single unit. A block replace-
ment policy specifies that each and every unit be re-
placed periodically with a new unit; that is, at times
t, 2t, 3t, and so forth. This policy further specifies
that any unit that fails in operation is immediately
replaced, but that the replacement units are never-
theless replaced themselves at the scheduled times;
that is, at times t, 2t, 3t, and so forth.
The use of block replacement, unlike age replace-
ment, does not require that one maintain records of
the length of time each unit has been in operation-
every t units of time all units are block replaced ir-
respective of how long they have been going. The
system does, however, require continuous surveil-
lance to detect any failures that may occur between
block replacements.
The question posed by the use of a policy of block
replacement is "at what time interval should units
be block-replaced to minimize the cost per unit of
time of utilization?" To answer this question, a cost
function must be developed to measure the expected
cost per unit of time from using a policy of replacing
a unit if it fails and, in any case, replacing it at time t.
Cost Considerations
As in the case of age replacement, two costs are
pertinent in the block replacement model: (1) the
lwr uilit cost of replacement after failure (to be de-
lloted by ca ) and (2) the per unit cost of replacement
before failure (to be denoted by Cb). The cost ratio,
Ie = ('uj c/, , must exceed 1 if block replacement is to
be warra1lt('d because only in this circumstance does
priol' l'('piaePIlI(,lIt possibly result in some savings.
This will IIIH)OIli>tpdiy be the case in many problems
because bioek (f.!:l'OlIp) l'('placement as opposed to
individual repiac(,HlPIIt. in some economies
even if operating raiilln's til('llIselves are not costly.
In this model we t.lrt' cost over the replace-
ment interval of t time Tiw ('Xp('ct('d cost per
unit in this interval is
G(t) = Cb + call! (l)
where M (t) is a function that represellts tire eXI
number of replacements by time t. ThiN rlllleLion,
M (t), is called the renewal function, and plays all
important role in replacement theory. It is
in detail in several of the references cited below; see,
for example, reference [6J. The first term in the cost
equation represents the per unit cost of the block re-
placement at time t, while the second term represents
the expected cost of interim replacements neces-
sitated by failures that occur prior to block replace-
ment.
The ratio R(t) = M(t)jt measures the long-run
average cost of operation per unit of time under block
replacement, and hence measures the effectiveness of
such a policy over an unlimited time span. The prob-
lem is to choose t, the block replacement interval, so
as to minimize R(t), and to maximize IjR(t) which
measures the long-run average time of utilization
per unit of cost.
Computational Considerations
The minimization of R(t) requires trial and error
computations for a variety of values of t. The main
problem is deriving an appropriate expression for
M (t), for a given failure distribution. An expression
for M (t) has been derived for certain mathematical
distributions. For example, reference [12J gives such
an expression for the Weibull distribution and refer-
ence [6] gives such an expression for the gamma dis-
tribution, while reference [5] details a procedure
which can be used to ascertain M (t) for any empirical
failure distribution.
Computer programs can be written to find an
optimal block replacement policy. Essentially what is
involved is calculation of R(t) for a variety of values
of t, and then choice of that value of t which leads to
the minimum value of R(t). Such computations
should proceed with care because R(t) may oscillate
and there may be more than one local minimum
value of R(t).
Efficiency of Block Replacement
We may measure the efficiency of an optimal block
replacement policy (with block replacement every
t* time units) relative to a policy of replacing only at
failure by the standardized cost ratio
p( t*) = R( t*)E (t) j e
a
It may be in certain cases that p(t*) > 1 which
means that even the optimal block replacement in-
terval leads to operating costs that are higher than
they are under a policy of replacing only failures.
If p(t*) < 1 then block replacement presumably is
worthwhile.
Block Hcplacemen t for the Weibull Distribution
The formula for R (t), if one assumes a Weibull
distribution, dcpends on the renewal function for the
Weibull distribution. This renewal function, referred
PLANNED REPLACEMENT: SOME THEORY AND ITS APPLICATION
117
o above, may be written in series from as (reference
[12])
00
M(t) = L Ai(
i=l
where the coefficients are defined by Al = 1 and
1
Ai = rei + 1)
i-I r(j(3 + l)r(i(3 - j(3 + 1)
- r(j + l)r(i(3 + 1) A
i
-
j
This expression permits calculation of R (t) for a
variety of values of t, and a systematic search for the
minimum value of that ratio.
Such computations may, of course, be burdensome.
In this paper, we provide a chart which facilitates
determination of an optimal block replacement policy
when one is dealing with a unit whose time-to-
failure can be adequately described by the Wei bull
distribution. This chart, Chart 5, is comparable to
Chart 4 which gave similar results for the age replace-
ment model, and has been prepared in much the
10
same way as Chart 4 was. In order to use this chart
one must have the value of k = calcb and of v, the
average service life of a unit in standard deviation
units. For values of k and v, the chart shows the
value of t* in standard deviation units away from
the mean-to be denoted by z*. Thus, as with Chart
4 one reads z* from the chart and then calculates
t* = E(t) + z*u(t).
Chart 5 also has traced out on it some values of
the standardized cost ratio, p(t*), that occur when
one follows the optimal policy indicated by the chart.
The blackened area in the lower left-hand region of
the chart represents combinations of k and v for
which block replacement is not worthwhile-replace-
ment only at failure is more economical, according to
the model.
Example
For an example, reconsider the problem situation
discussed in connection with the age replacement
model, involving an electronic tube used in commer-
.05
.10
(pI
.20
.35
.50
.75
.90
25 50 100
Average service life in standard deviation units (vI
CHART 5. Optimal Policies Under Block Replacement: Weibull Distribution.
118 GERALD J. GLASSER
cial airline communication equipment. Suppose under
block replacement that k is determined to be 15
rather than 11 as under age replacement. (Usually,
Cb is lower in connection with block replacement
than in age replacement because of the economies of
group replacement.) As before, however, suppose
that a Weibull distribution can be assumed to de-
scribe failures reasonably, that the mean failure time
is 8970 hours, that the standard deviation is 2990
hours and, hence, that v = 8970/2990 = 3.00. Inter-
polation in Chart 5 suggests that the optimal block
replacement policy has z* = -1.84 so that
t* = 8970 - (1.84) (2990) = 3468 hours
The optimal block replacement policy is to replace
all tubes after 3468 hours of use, and to replace
intermittent failures as they occur. Interpolation in
the chart also shows that p(t*) = .25 which indi-
cates that block replacement incurs costs of opera-
tion only 25 per cent of those that would be incurred
by a maintenance system that called for replacement
only at failure.
More Detailed Models
The age replacement model and the block replace-
ment model, as presented, are among the simplest
models available for planned replacement in their
simplest form. Many writers have described many
other models, which differ in purpose and in com-
plexity from the ones considered herein.
For example, both of the models considered herein
assume continuous surveillance and the immediate
replacement of operating failures. When this is not
realistic for one reason or another, various modifica-
tions in the model can be made. The model might be
expanded to consider downtime, and its cost. Also
the cost of periodic inspections to discover failures
may be considered in the model.
Further, the theory as presented applies when
there is no substantial uncertainty about the nature
of the distribution of times-to-failure and the param-
eters of that distribution. Replacement theory models
under uncertainty take account of the fact that one
may have available only imperfect estimates of the
parameters, and that these can be improved with
time and additional information. Other models may
take account of uncertainty about the nature of the
distribution, per se.
There are many other details which may be built
into a replacement theory model, if warranted. Pro-
vision may be made for discounting future costs.
The application of replacement policies may be
treated over a finite time span rather than regarded
over an unlimited period of time. An important class
of models, already mentioned earlier, consider dete-
rioration and wear rather than normal operation up
until absolute failure takes place. Also, rules for re-
placement can be constructed based not only on age
or usage or time, but on some measure of observed
wear.
As in all branches of mathematical model building,
the decision on the amount of detail to build into a
model rests with the judgment of the model builder
rather than on objective criteria. Often a simple
model suffices, and provides results essentially similar
to those developed from more complicated models.
Finally, it may be noted that the models described
herewith are applicable to problems in maintaining
individual parts or pieces of equipment, or replacing
groups of homogeneous parts. Application of re-
placement theory to multicomponent, complex sys-
tems is also an important, useful and growing area of
study, as will be seen by a review of some of the
references given below.
References
1. BARLOW, RICHARD E., "Maintenance and Replacement
Policies", in Statistical Theory of Reliability, Zelen,
Marvin, Ed., The University of Wisconsin Press,
1963, pp. 75-95.
2. BARLOW, RICHARD E. AND PROSCHAN, FRANK, "Planned
Replacement", in Studies in Applied Probability
and Management Science, Arrow, Kenneth J., Karlin,
Samuel, and Scarf, Herbert, Eds., Stanford Univer-
sity Press, 1962" pp. 63-87.
3. BARLOW, RICHARD E. AND PROSCHAN, FRANK, Mathe-
matical Theory of Reliability, Wiley, New York, 1965.
4. BAZOVSKY, IGOR, Reliability Theory and Practice, Pren-
tice-Hall, Englewood Cliffs, N. J., 1961.
5. CHURCHMAN, C. WEST, ACKOFF, RUSSELL L. AND ACK-
OFF, LEONARD E., Introduction to Operations Re-
search, Wiley, New York, 1957, Chapter 17.
6. Cox, D. R., Renewal Theory, Methuen, London, 1962.
7. DEAN, BURTON V., "Replacement Theory", in Progress
in Operations Research, Volume I, Ackoff, Russell L.,
Ed., Wiley, New York, 1961, pp. 327-362.
8. GLASSER, GERALD J., "The Age Replacement Problem",
Technometrics, Vol. 9, No.1, February 1967, pp. 83-91.
9. GOVINDARAJULU, ZAKKULA, "A Supplement to Men-
denhall's Bibliography on Life Testing and Related
Topics", Journal of the American Statistical Associa-
tion, Vol. 59, No. 308, December 1964, pp. 1231-1291.
10. KAMINS, M. AND MCCALL, J. J., JR., Rules for Planned
Replacement of Aircraft and Missile Parts, RAND
Corporation Memorandum RM-281O-PR, November
1961.
11. M]<;NDENHALL, W., "A Bibliography on Life Testing and
PLANNED REPLACEMENT: SOME THEORY AND ITS APPLICATION 119
Related Topics", Biometrika, Vol. 45, 1958, pp. 521-
543.
J ~ . SMITH, W. L. AND LEADBETTER, M. R., "On the Re-
newal Function for the Weibull Distribution",
Technometrics, Vol. 5, No.3, August 1963, pp. 393-
396.
13. WEISS, GEORGE H., "A Survey of Some Mathematical
Models in the Theory of Reliability", in Statistical
Theory oj Reliability, Zelen, Marvin, Ed., The Uni-
versity of Wisconsin Press, 1963, pp. 3-54.
Key words: Age Replacement Model, Block Replace-
ment Model, ' Failure Distributions, Maintainability,
Planned Replacement, Preventive Maintenance, Re-
placement Theory.