On the Use of Renewal Theory in Machine Replacement Models

Abstract

In this paper, we give examples on how the renewal theory can be applied in modeling machine replacement problem. We begin with a deterministic model to illustrate the concept of a machine cycle, then follow by a stochastic model with a general cost. We then compare two popular replacement policies: the quantitybased replacement policy and time-based replacement policy for a single machine replacement problem. We also prove an interesting result that the optimal costs of both policies are the same under certain assumptions.