Group Replacement Policy

Group Replacement of Items that Fail Completely

This policy is concerned with the items that either work perfectly, or work partially or inefficiently or fail completely. This situation generally happens when the system consists of a large number of identical low cost items that are increasingly liable to failure with age. In such cases, the replacement of individual items would incur a set of costs, which is independent of the number replaced.  However it may be advantageous to replace all the items at a time at a fixed interval.  This policy is known as group replacement policy and is very attractive, particularly when

• The value of any individual item is so small.
• The cost of keeping records of individual ages is high that cannot be justified.
• The purchase of such identical items in bulk can be had at discounted rate.
• Average individual replacement would be costlier than the average group replacement.
• If sufficient number of standby machines are available.
• New designs of the equipment considerably increase the production rate.

In all the above cases the two types of replacement policies considered are :

• Individual Replacement

Under this policy, an item is replaced instantly after its failure.

• Group Replacement

Under this policy a decision will be taken so as to replace all the items irrespective of the fact that the items have failed - not failed, provided if any item fails, before the optimal time it may be replaced individually.