Exploring an optimal maintenance strategy for repairable assets

Equipment in the process industry is often subject to decay and requires maintenance, repair and eventual replacement. The challenge of competition and the accompanying regulatory regime requires that actions be integrated and cost effective. In Ansell, Archibald and Thomas (200 1) an approach to the assessment of asset life of maintained equipment in the process industry was explored using a semi-parametric approach. Using stochastic dynamic programming techniques an approach to find the optimal strategy was developed in Ansell, Archibald and Thomas (200 1 a). A major aspect to the development of optimal strategy for repair and replacement is the costs of these activities. Often the costs can only be roughly ascertained in terms of hours expended on the activity. Detailed costings are rarely available. The discount factor will depend on the interest rate in place. Generally a conservatively high level has been taken but with current low rates one needs to explore the sensitivity of solution to the discount factor. Also there is a need to explore the sensitivity of the solution to changes in the costs of the maintenance activities involved. In this paper we explore the stability of the results to changes in the relative costs. It is seen that two costs seem to be more important than the others, hence the accounting effort appears to be best directed towards these costs.