Algorithm for Deciding Group Replacement Policy

• Step 1

Find the probability of failure of items at the end of each period.

• Step 2

Find the number of replacements made at the end of each period with reference to probability of failures at the end of each period considering its pervious replacements.

• Step 3

Calculate cost of individual replacement at the end of each period.

• Step 4

Calculate cost of group replacement at the end of each period.

• Step 5

Calculate total cost of group replacement including individual replacements by adding Steps 3 and 4.

• Step 6

Calculate the average cost per period by dividing the result in Step 5 with period number.

• Step 7

Identify the least among the average cost per period as the period of group replacement policy.