A cost model for condition based overhaul/replacement

The paper presents a methodology to utilise available information from condition monitoring systems. Before a new approach to determine optimal time for overhaul/replacement is introduced, a brief review of existing mathematical models for this purpose is presented. Unlike the usual approach of looking at failure rates and life time distributions, the focus is put on extracting information from models of continuous‐time deterioration processes. Defining a finite number of condition levels of the system, the continuous‐time deterioration process is described by a condition transition probability matrix. All input data are modelled as a function of time or system status. We have also the flexibility to include cyclic variation as for example changes in production demand.