1

Maintenance Models

Prof. Robert C. Leachman
IEOR 130, Methods of Manufacturing Improvement
Spring, 2011

1. Introduction

The maintenance of complex equipment often accounts for a large portion of the costs
associated with that equipment. It has been estimated, for example, that the maintenance
costs in the military comprise almost one-third of all of the operating costs incurred.

Alternative philosophies of equipment maintenance are as follows:

1. Breakdown maintenance. The equipment is put in service and operated until it
fails. Maintenance forces then repair the equipment and attempt to restore it as
closely as possible to a like-new condition, whereupon the equipment is put back
in operation. Maintenance is confined to repair following failures.

2. Preventative maintenance. The equipment is periodically taken out of service for
scheduled maintenance including replacement of worn components, inspection
and cleaning, etc. The frequency of machine maintenance may be based on hours
of usage, number of machine cycles, calendar time, etc. Repairs following failures
also are performed as required on an on-call basis. (Hopefully, the preventative
maintenance makes failures less likely.)

3. Predictive maintenance. The equipment is continually monitored or frequently
inspected by manual or automated means. Required maintenance is identified and
performed upon inspection. (This philosophy presumes a level of knowledge
about the equipment sufficient to be able to detect flaws or wear in the equipment
upon inspection.) As before, repairs following failures are performed as required
on an on-call basis. (Hopefully, the frequent inspection or continuous monitoring
makes failures unlikely.)

Generally, maintenance evolves from breakdown maintenance to preventative
maintenance to predictive maintenance as the manufacturing organization and systems
become more sophisticated and knowledgeable about the equipment. The famous TPM
(total productive maintenance) paradigm stresses the importance of completing the
evolution to predictive maintenance in order to attain the highest productivity.

Standard maintenance terminology is as follows:

MBTF Mean time between failures. This is the expected time from completion of repair
following failure until the next failure.

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MTTR Mean time to repair. This is the expected time to repair the equipment after
failure, including time waiting for parts and expertise, time to effect the repairs, and time
to test and re-qualify the equipment before returning to production mode.

Availability The fraction of time the equipment is available for production operation.
For the case of breakdown maintenance, the machine follows a renewal process,
alternating between operating and failure states. In that case the availability may be
calculated as

.
MTTR MTBF
MTBF
A
+
=


2. Scheduling Preventative Maintenance

The purpose of preventative maintenance is to decrease the likelihood that a machine will
fail when in operation. At the heart of such a policy is the assumption that it costs more to
correct a failed machine than it does to perform scheduled maintenance. For example, if
failure means that the production line must be stopped, whereas preventative maintenance
could be accomplished at a convenient time when the production line is not operating,
then the cost of planned maintenance would be less than the cost of unplanned
maintenance. As another example, failure in operation might result in destruction of
work-in-process, whereas planned maintenance might be performed without consuming
any product.

The abstract problem of planning maintenance intervals is mathematically equivalent to
the abstract problem of planning replacement intervals for the item. We can think of
maintenance in terms of restoring an item to like-new condition, in effect a replacement
of the item. As before, the case of interest is where it costs more to replace a failed
machine than it does to replace a working one.

Because of the memoryless property of the exponential distribution, if an item or a group
of items obeys an exponential failure law (i.e., its expected lifetime until failure does not
decrease as it gets older), then there is no advantage to replacing prior to failure. In the
exponential case, the likelihood that failure will occur in a time At is the same just after a
planned replacement as it is for an item that has been operating for an arbitrary amount of
time. Hence planned maintenance strategies have value only if the item exhibits aging,
that is, it has an increasing failure rate function.

2.1. Planned Replacement of a Single Item

Consider a single piece of continuously operating equipment whose lifetime until failure
is a random variable T with known cumulative distribution function F(t). We assume that
T is a continuous random variable. Suppose that it costs c
1
to replace the item when it
fails and c
2
< c
1
to replace the item prior to failure. We assume that planned replacements
are made exactly t time units after the last replacement. The goal is to find the optimal
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value of t to minimize the average cost per unit time of both planned and unplanned
replacements (or equivalently, both planned and unplanned maintenance).

A cycle is the time between successive replacements (or maintenance procedures).
Because the process restarts itself after each replacement, irrespective of whether the
replacement was planned or unplanned, we may apply the renewal method to obtain an
expression for the expected cost per unit time. That is,

{ }
{ }
{ }
.
cycle a of length
cycle per cost
unit time per cost
E
E
E =

Now

{ } { } failure a of result the is t replacemen cycle per cost
1
P c E =
{ }. planned is t replacemen
2
P c +

Notice that P{replacement is the result of a failure} = } { t T P s = F(t), and P{replacement
is planned} = } { t T P > = 1 F(t), where T is the lifetime of the item placed into service
at the end of the previous cycle. It follows that
{ } . )) ( 1 ( ) ( cycle per cost
2 1
t F c t F c E + =

Let T be the time of failure of the item placed into service at the end of the previous cycle.
Clearly, the next replacement will occur at min(T, t). Hence

{ } ( ) { } ( )
}

= =
0
) ( , min , min cycle a of length dx x f t x t T E E

} }

+ =
t
t
dx x f t dx x xf ) ( ) (
0


. )] ( 1 [ ) (
0
t F t dx x xf
t
+ =
}


The expected cost per unit time, say G(t), is thus expressed as

.
)] ( 1 [ ) (
)] ( 1 [ ) (
) (
0
2 1
t F t dx x xf
t F c t F c
t G
t
+
+
=
}


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The distribution f(x) is typically not known in a practical case. However, it is often
practical to collect data on lifetimes in terms of the probability of failure in discrete time
periods of life k = 1, 2, 3, . For example, p
3
represents the fraction of items that fail in
the third period of service after replacement. For integer lifetimes t, we can approximate
the partial lifetime expectation term in terms of the discrete data as


. ) (
1
0

}
=
~
t
k
k
t
p k dx x xf

Our final expression for the objective function is then

.
)] ( 1 [
)] ( 1 [ ) (
) (
1
2 1
t F t kp
t F c t F c
t G
t
k
k
+
+
=

=


The solution strategy is to compute G(t) for t = 1, 2, 3, and identify which value of t
provides the lowest expected cost per unit time and therefore the best planned
maintenance interval.

We remark that in a practical case it may be difficult to estimate the costs c
1
and c
2

involved. However, it is almost always practical to collect and analyze data concerning
the time required for preventative maintenance procedures and for unplanned
maintenance (MTTR, including time waiting for repairs and time to re-qualify
equipment). If c
1
is set to the time required to perform unplanned maintenance and c
2
is
set to be the time required to perform planned maintenance, then G(t) expresses the
expected down time per unit time, i.e., 1 availability. In that case, minimizing G(t) is
equivalent to maximizing availability.

2.2. Exponential Lifetimes

It was asserted above that there is no advantage to planned replacement when the lifetime
has an exponential distribution. We now mathematically prove this. Suppose
that
t
e t F

=1 ) ( . Then the expected length of each cycle is

| |
t t t
t
x
te t e te dx e x

+ + = +
}
) 1 ( 1
1
0


. ) 1 (
1
t
e

=

It follows that

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.
1 1
) (
) 1 (
1
) 1 (
) (
2 1 1 2 1
t
t
t
t t
e
e c c c
e
e c e c
t G

+
=

As t , the term 0
t
e

, so that
1
) ( c G = . Furthermore, = ) 0 ( G . It can be
shown using calculus that G(t) is monotonically decreasing for all t. Hence the optimal
solution is = t , i.e., planned replacement should never be made.

We have shown that if the lifetime distribution is exponential (i.e., it has a constant
failure rate), then there is no economy in replacing an item prior to the time it fails. This
also holds if the failure rate is decreasing.

3. Block Replacement for a Group of Items

In certain circumstances it is more economical to replace groups of items at the same
time rather than one by one. For example, it could be more economical to replace all the
tires on a truck when a replacement is made. The costs of transporting the truck to a
service area, placing the truck on a lift, and paying a technician to mount and balance the
tires could be comparable to the cost of a tire itself. If all the tires were replaced
simultaneously, this cost would be incurred less often than if the tires were individually
replaced.

This section develops a model to determine the optimal time to replace an entire group of
items. To keep the mathematics tractable, we will assume that the lifetime of each
operating unit is a discrete random variable with a known distribution. That is, suppose p
k

is the probability that an item fails in period k assuming it was placed in service at period
0. These probabilities may be estimated directly from historical data or computed from a
continuous distribution.

Assume that n
0
items are placed into service at time 0. Suppose there is no block
replacement and all items that fail in a period are replaced at the end of that period. We
will also assume for simplicity that p
k
is the actual proportion of units k periods old that
fail. Then the number of failures occurring in period 1 is n
1
= n
0
p
1
.

In period 2 the proportion of the original group of items that fail is n
0
p
2
, and the
proportion of items placed into service in period 1 that fail is n
1
p
1
. Hence, the expected
number of failures in period 2 is n
2
= n
0
p
2
+ n
1
p
1
. Continuing with this argument, we
obtain

.
1 1 1 1 0
p n p n p n n
k k k k
+ + + =

Now suppose that individual replacements cost a
1
each and the entire block of n
0

components can be replaced for a
2
. If all n
0
items were replaced at the end of each period,
the cost each period would be a
2
+ a
1
n
1
. If all n
0
items were replaced at the end of every
other period, the cost incurred every two periods would be a
2
+ a
1
(n
1
+ n
2
) or an average
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per period cost of [a
2
+ a
1
(n
1
+ n
2
)] / 2. Similarly, the average per period cost of replacing
all n
0
items after k periods is

. ) (
1
1 2
k
n a a
k G
k
j
j
=
+
=

The optimal number of periods to replace all n
0
items is the value of k that minimizes
G(k). The minimum value of G(k) should be compared to the expected cost per period
assuming that items are replaced as they fail. Let

=
=
1
) (
k
k
kp T E

represent the expected lifetime of a single component. Then the cost of making
replacements on a one-at-a-time basis is a
1
/ E(T) or n
0
a
1
/ E(T) for the entire block of
items. This should be compared to the optimal value of G(k) to determine if a block
replacement strategy is economical.


Acknowledgement

These lecture notes are partially adapted from Nahmias (2001).


Bibliography

Nahmias, Steven (2001). Production and Operations Analysis, fourth edition, McGraw
Hill Irwin, New York.