Maintenance and marginal cost analysis of a two-unit cold standby system

Abstract

The Marginal Cost Analysis (MCA) of maintenance policies is a concept gaining interest in the recent years. This approach, due to Berg, has been categorized as an Economics Oriented Approach, as different from the classical probability centered approach. The MCA has been successfully applied to the Age Replacement and the Block Replacement policies, and was shown to be flexible enough to permit extensions and generalizations. In this thesis, we apply the MCA approach to a more complex model. We consider a two-unit cold standby system. Upon failure of the working unit in the time interval [0,T) the unit is replaced by the standby unit if available. If the standby unit is in repair, the system is down, and a downtime cost is incurred. The item inspected at time T is in one of two states: “good” , or “critical” . The good unit continues operation, whereas a unit in critical state is sent to repair. The switchover is immediate. We derive and compare the marginal cost function as well as the long-run cost per unit time function.