Optimal replacement for a one‐unit system subject to delivery and test Available to Purchase

Notes that the so‐called age replacement model was first proposed to determine the optimum age limit at which the system is replaced after installation. It was then extended by further assuming that the one‐unit system is supported by a buffer which stores only one spare for replacement, and that whenever each replacement starts, one new unit is ordered and then arrives at the buffer in a random delivery time. Others have studied the same model but with the restriction that each new unit will be ordered in a deterministic lead time later, after each replacement starts. This article extends the age replacement model by taking into consideration the possibility that the unit, on arrival, may not be acceptable after test. The expression of the long‐run average cost per unit time is then derived. How to find the optimum age limit which minimizes such an expression is studied and two numerical examples are presented.