Optimal replacement threshold and inspection interval for condition-based maintenance with variable failure cost

In condition-based maintenance (CBM) with periodic inspection, the item is preventively replaced if failure risk, which is calculated based on monitoring information, exceeds a pre-determined threshold. It is also replaced if, at any time, failure occurs. In the determination of optimal replacement threshold, it is often assumed that the failure replacement cost is constant. However, this assumption is not always true as, in some practical cases; the failure replacement cost may depend on the item's degradation state at which the failure occurs and/or the time it fails. In this paper, derivation of optimal replacement threshold and optimal inspection interval for CBM with variable failure cost is provided. The basis is the control limit policy for CBM, already developed by the researchers and referenced in the paper. The proposed approach is illustrated through a numerical example.