1983 Volume 26 Issue 4 Pages 279-292
This paper consideres an optimal ordering and replacement problem of a continuous time Markovian degradation system. An optimal policy minimizes the expected cost per unit time in an infinite time horizon. The problem is formulated by semi-Markov decision process and the optimality of an (n,N)-policy is shown. Further, the expected cost rate of the system operated under an (n,N)-policy is obtained.