Block Replacement by Considering Influence of Inflation and Time Value of Money on the Optimal Replacement Policy

Abstract

This work aims at finding the block replacement period for a block of items (a block of computers, a block of LCD televisions in hotel industry, a block of pressure gauges in filling plants, a block of cutting tools in a work shop etc.) that may consist of many intermediate repairable states like minor repair, major repair etc. between functional and complete failure states that are more realistic in practice.The objective of replacement is to decide best policy to determine an age at which the replacement is the most economical instead of continuing at increased maintenance costs. The fundamental objective of replacement is to direct the organization for maximising its profit (or minimizing cost).The main objective of the model is to provide means for analyzing the behaviour of the system for the purpose of improving its performance. Consequently this study aims at exploring and evaluation of an option of reengineering in lieu of replacement. The objective of reengineering is to improve the process performance by alteration, or partial replacement of a process and thereby reducing the maintenance costs.