Overhaul and Replacement Decisions for Capital Equipment: A Case

Abstract

An attempt has been made to formulate and apply an overhaul and replacement decision model in the context of maintenance of capital equipment in a government utility (power generation) plant. The method of solution used is a recursive one, where the problem involves repetitive decisions over a long period which falls within the dynamic programming area. It is a long‐term sequential discrete optimisation formulation where “minimise total cost” is the criterion for optimisation. Overhaul is considered to be a restorative maintenance action which is taken to improve the condition of the equipment. Maintenance, in the form of overhaul or repair, does not return the equipment to the new condition, as achieved by replacement. The results have been compared with the existing system. The comparison provided at the end of the article brings out the gap between the existing and the proposed practice.