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This paper proposes a hierarchical modeling approach for the reliability analysis of phased-mission systems with repairable components. The components at the lower level are described by continuous time Markov chains which allow complex component failure/repair behaviors to be modeled. At the upper level, there is a combinatorial model whose structure function is represented by a binary decision diagram (BDD). Two BDD ordering strategies, and consequently two evaluation algorithms, are proposed to compute the phased-mission system (PMS) reliability based on Markov models for components, and a BDD representation of system structure function. The performance of the two evaluation algorithms is compared. One algorithm generates a smaller BDD, while the other has shorter execution time. Several examples, and experiments are presented in the paper to illustrate the application, and the advantages of our approach.