# Optimal Replacement Policy under Cumulative Damage Model and Strength Degradation with Applications

## TL;DR

This paper develops a simulation-based method to determine optimal replacement policies for systems experiencing concurrent strength degradation and cumulative damage, applicable across diverse scenarios.

## Contribution

It introduces a flexible, simulation-based approach for optimizing replacement strategies under complex degradation models, overcoming limitations of prior fixed-distribution methods.

## Key findings

- The method effectively minimizes expected costs in real-world case studies.
- It accommodates various distributional assumptions and dynamic degradation processes.
- The approach is easy to implement and broadly applicable.

## Abstract

In many real-life scenarios, system failure depends on dynamic stress-strength interference, where strength degrades and stress accumulates concurrently over time. In this paper, we consider the problem of finding an optimal replacement strategy that balances the cost of replacement with the cost of failure and results in a minimum expected cost per unit time under cumulative damage model with strength degradation. The existing recommendations are applicable only under restricted distributional assumptions and/or with fixed strength. As theoretical evaluation of the expected cost per unit time turns out to be very complicated, a simulation-based algorithm is proposed to evaluate the expected cost rate and find the optimal replacement strategy. The proposed method is easy to implement having wider domain of application. For illustration, the proposed method is applied to real case studies on mailbox and cell-phone battery experiments.