Joint optimization of age replacement and continuous review spare provisioning policy

A new policy for joint optimization of age replacement and spare provisioning has been proposed by incorporating a continuous review (s,S) type inventory policy, where s is the reorder level and S is the maximum stock level. Gives cost formulations for a single operating unit situation and outlines simulation procedure to determine optimal values of the decision variables by minimizing total cost of replacement and inventory. Studies the behaviour of this policy for a large number of case problems and highlights the effects of different cost elements, item failure characteristics and lead time characteristics. Also determines, for all case problems, optimal (s,S) policies to support Barlow-Proschan age policy. Simulation results clearly indicate that the jointly optimal policy is more cost-effective than Barlow-Proschan policy.