Replacement Theory

Introduction: The replacement problems are concerned with the situations that arise when some
items such as machines, men, electric appliance etc. need replacement due to their decreased
efficiency, failure or breakdown. The deteriorating efficiency or complete breakdown may be
either gradual or all of a sudden.
Def: A replacement is called for whenever new equipment offers more efficient or economical
service than the existing one.
Replacement problem: The problem in such situation is to determine the best policy to be
adopted with respect to replacement of the equipment. In case of items whose efficiency go on
decreasing according to their age, we have to spend more and more money on account of
increased operating cost, increased repair cost, increased scrap, etc. In such cases the
replacement of an old item with a new one is the only alternative to prevent such increased
expenses. Thus, it becomes necessary to determine the age at which replacement is more
economical rather than continuing with the same.
Types of Replacement Situations
The replacement situations may be classified into four categories:
a) Replacement of items that become worse with time e.g. milk plant machinery, tools,
vehicles, equipment etc.
b) Replacement of items which do not deteriorate with time but break down completely
after certain usage e.g. electric tubes, machinery parts etc.
c) Replacement of items that becomes obsolete due to new developments.
d) The existing working staff in an organization gradually reduces due to death, retirement
and other reasons.
The problem is to decide the best policy to adopt with regard to replacement. The need for
replacement arises in a number of different situations so that different types of decisions
may have to be taken. For example:
a) It may be necessary to decide whether to wait for certain items to fail, which might
cause some loss, or to replace the same in advance, even at a higher cost.
b) An item can be considered individually to decide whether or not to replace
immediately.
c) It is necessary to decide whether to replace by the same item or by an improved type of
item.
Types of Failure
There are two types of failure:

i) Gradual failure ii) Sudden failure

Gradual failure: It means slow or progressive failure as the life of the item increases, its
efficiency decreases resulting in decreased productivity, increased operating cost and decrease in
the value of the item, e.g. machines/equipment etc.
Sudden failure: In this type of failure the items do not deteriorate markedly with service but
which ultimately fail after some period of usage, thus precipitating cost of failure. Sometimes
sudden failure of an item may cause loss of production or may also account for damaged or
faulty products. The period between installation and failure is not constant for any particular type
of equipment but will follow some probability distribution which may be progressive,
retrogressive or random in nature.

a) Progressive failure: Under this mechanism, the probability of failure increases with the
increase in the life of an item.
b) Retrogressive failure: Certain items have more probability of failure in the beginning of
their life and as time passes, the chances of failure become less. In other words, the
ability of the unit to survive the initial period of life increases its expected life.
c) Random failure: Under this mechanism, constant probability of failure is associated with
items that fail from random causes such as physical shocks, not related to age.

Assumptions: Following assumptions are essentially required for replacement decisions:

i) The quality of the output remains constant.
ii) Replacement and maintenance costs remain constant.
iii) The operational efficiency of the equipment remains constant.
iv) There is no change in technology of the asset under consideration.
Solving a Replacement Problem
Methodology for tackling replacement problem which is discussed below:
i) Identify the items to be replaced and also their failure mechanism.
ii) Collect the data relating to the depreciation cost and the maintenance cost for the items
which follow gradual failure mechanism. In case of sudden failure of items, collect the
data for replacement cost of the failed items.
iii) Select a suitable replacement model.

Replacement of items whose efficiency deteriorates with time

Introduction

In any establishment, sooner or later equipment needs to be replaced, particularly when new
equipment gives more efficient or economical service than the old one. In some cases, the old
equipment might fail and work no more or is worn out. In such situations it needs more
expenditure on its maintenance than before. The problem in such situation is to determine the
best policy to be adopted with respect to replacement of the equipment. The replacement theory
provides answer to this question in terms of optimal replacement period. Replacement theory
deals with the analysis of materials and machines which deteriorate with time and fix the optimal
time of their replacement so that total cost is the minimum.
Replacement Decisions
The problem is to decide the best policy to adopt with regard to replacement. The need for
replacement arises in a number of different following situations so that different types of
decisions may have to be taken.

 It may be necessary to decide whether to wait for a certain item to fail which might
cause some loss or to replace earlier at the expense of higher cost of the item.
 The item can be considered individually to decide whether to replace now or if not
when to reconsider the item in question.
 It is necessary to decide whether to replace by the same item or by a different type of
item.

Types of Replacement Problems

i) Replacement policy for items, efficiency of which declines gradually with time without
change in money value.
ii) Replacement policy for items, efficiency of which declines gradually with time but with
change in money value.
iii) Replacement policy of items breaking down suddenly
a) Individual replacement policy
b) Group replacement policy

Replacement of items whose maintenance cost increases with time and the value of money
remains same during the period
The following costs are considered in such decisions:
C: Capital cost of a certain item say a machine
s(t): The selling or scrap value of the item after t years
f(t): Operating (or maintenance) cost of the item at time t
n: Optimal replacement period of the item
The operating cost function f(t) is assumed to be strictly positive. It may be continuous or
discrete.
 a) When t is a continuous variable

Now the annual cost of the machine at time t is given by C - S(t) + f(t) and since the total
maintenance cost incurred on the machine during n years is,

.
Total cost T incurred on machine during n years is given by,

Thus the average annual cost incurred on the machine per year during n years is given by

To determine the value of optimal period (n), the principle of minima will be employed.

Clearly

Therefore, it can be seen that A(n) or TA = f(n) is a minimum for T provided that f(t) is non -
decreasing and f(0) = 0. Hence, if time is measured continuously, then the average annual cost
will be minimized by replacing the item when the average cost becomes equal to the current
maintenance cost.

b) When time is a discrete variable

Here the period of time is considered as fixed and n takes values 1,2,3,… then

By using finite differences, A(n) will be a minimum for that value of n for which
or
For this, we write

Similarly, it can be shown

This suggests the replacement policy that if time is measured in discrete units, then the average
annual cost will be minimized by replacing item when the next periods maintenance cost become
greater than the current average cost. Hence, replace the equipment at the end of n years, if the
maintenance cost in the (n+1)th year is more than the average total cost in the (n)th year and the
(n)th years maintenance cost is less than the previous years average total cost.
The following examples will illustrate this methodology.
Example 1: A milk plant is considering replacement of a machine whose cost price is Rs.
12,200 and the scrap value Rs. 200. The running (maintenance and operating) costs in Rs. are
found from experience to be as follows:
Year: 1 2 3 4 5 6 7 8
Running Cost: 200 500 800 1200 1800 2500 3200 4000
When should the machine be replaced?
Solution The computations can be summarized in the following tabular form:

Table 13.1 Calculations for average cost of machine

(In Rupees)
Running Cumulative Depreciation Cost Total Cost TC Average
Year
Cost Running (5) = (3) + (4) Cost
(1) Cost (4)
(2) (3) (6) = (5)/(1)
1 200 200 12000 12200 12200
 2 500 700 12000 12700 6350
3 800 1500 12000 13500 4500
4 1200 2700 12000 14700 3675
5 1800 4500 12000 16500 3300
6 2500 7000 12000 19000 3167
7 3200 10200 12000 22200 3171
8 4000 14200 12000 26200 3275

From the table it is noted that the average total cost per year, A(n) is minimum in the 6 th year
(Rs. 3167). Also the average cost in 7th year (Rs.3171) is more than the cost in 6th year. Hence
the machine should be replaced after every 6 years.
Example 2
A Machine owner finds from his past records that the maintenance costs per year of a machine
whose purchase price is Rs. 8000 are as given below:
Year: 1 2 3 4 5 6 7 8
Maintenance Cost: 1000 1300 1700 2200 2900 3800 4800 6000
Resale Price: 4000 2000 1200 600 500 400 400 400
Determine at which time it is profitable to replace the machine.
Solution C = Rs. 8000. Table 13.2 shows the average cost per year during the life of machine.
Here, The computations can be summarized in the following tabular form:
Table 13.2 Calculations for average cost of machine
f(t) Cumulative Scrap Total cost
Year
maintenance value
cost
1 1000 1000 4000 5000 5000
2 1300 2300 2000 8300 4150
3 1700 4000 1200 10800 3600
4 2200 6200 600 13600 3400
5 2900 9100 500 16600
6 3800 12900 400 20500 3417
7 4800 17700 400 25300 3614
8 6000 23700 400 31300 3913

The above table shows that the value of TA during fifth year is minimum. Hence the machine
should be replaced after every fifth year.
Example 3
The cost of a machine is Rs. 6100 and its scrap value is only Rs.100. The maintenance costs are
found to be
Year: 1 2 3 4 5 6 7 8
Maintenance Cost (in Rs.): 100 250 400 600 900 1250 1600 2000
When should the Machine be replaced?
Solution
C = 6100, s(t) = 100 The computations can be summarized in the following tabular form:
Table 13.3 Calculations for average cost of machine
Replace Cumulative Total cost
at the end maintenance cost
of year

1 100 100 6100 6100

2 250 350 6350 3175
3 400 750 6750 2250
4 600 1350 7350 1737.50
5 900 2250 8250 1650
6 1250 3500 9500
7 1600 5100 11100 1585.7
8 2000 7100 13100 1637.50

It is now observed that the machine should be replaced at the end of sixth year otherwise the
average cost per year will start to increase.
Replacement of items whose maintenance cost increases with time and the money value
changes at a constant rate:
To understand this model let us define the following terms:
Money Value: Since money has a value over time, therefore the explanation of the statement:
Money is worth 10% per year can be given in two ways:
(a) In one way, spending Rs.100 today would be equivalent to spend Rs.110 in years time.
In other words if we plan to spend Rs.110 after a year from now, we could spend Rs.100
today and an investment which would be worth Rs.110 next year.
(b) Alternatively if we borrow Rs.100 at the interest of 10% per year and spend
Rs.100 today, we have to pay Rs.100 after one year (next year).
Thus, we conclude that Rs.100 is equal to Rs.110 a year from now. Consequently Rs. 1 from a
year now is equal to (1+0.1)-1 rupee today.
Present Worth Factor
As we have seen, a rupee a year from now will be equivalent to (1+0.1)-1 rupee today at the
discount rate of 10% per year. So, one rupee in n years from now will be equal to (1+0.1)-n.
Therefore, the quantity (1+0.1)-n is called the Present Worth Factor (PWF) or Present Value (PV)
of one rupee spent in n years from now. In general, if r is the rate of interest, then (1+r)-n is
called PWF or PV of one rupee spent in n years from now onwards. The expression (1+r)-n is
known as compound amount factor of one rupee spent in n years.
Discount Rate
Let r be the rate of interest. Therefore present worth factor of unit amount to be spent after one

year is .
Then v is known as the discount rate. The optimum replacement policy for replacement of item
where maintenance costs increase with time and money value changes with constant rate can be
determined by following method:
Suppose that the item (which may be machine or equipment) is available for use over a series of
time periods of equal intervals (say one year). Let
C = Purchase price of the item to be replaceds
Rt = Running (or maintenance) cost in the tth year
R = Rate of interest

is the present worth of a rupee to be spent in a year hence.

Let the item be replaced at the end of every nth year. The year wise present worth of expenditure
on the item in the successive cycles of n years can be calculated as follows:

Year 1 2---- n n+1 n+2 ---- 2n 2n+1

Present C+R1 R2 v Rnvn-1 (C+R1)vn R2vn+1 Rnv2n-1 (C+R1)v2n

worth

Assuming that machines has no resale value at the time of replacement, the present worth of the
machine in n years will be given by
Summing up the right-hand side, column-wise

,
using sum of an infinite G.P.

f(n) and f(n+1) given above at n = 0,1,2, are called the weighted average cost of previous n years
with weights 1,v, v2, ----vn-1respectively. P(n) is the amount of money required now to pay all the
future costs of acquiring and operating the equipment when it is renewed every n years.
However, if P (n) is less than P (n+1) then replacing the equipment each n year is preferable to
replacing each n years is preferable to replacing each (n+1) years. Further, if the best policy is
replacing every n years, then the two inequalities P (n+1) - P (n) > 0 and P (n-1) - P (n) < 0 must
hold, without giving the proof we shall state the following two inequalities which holds good
at n, the optimal replacement interval.

As a result of these two inequalities, rules for minimizing costs may be stated as follows:

1. Do not replace if the operating cost of next period is less than the weighted average of
previous costs.

2. Replace if the operating cost of the next period is greater than the weighted average of
the previous costs.

Working Procedure
The step-by-step procedure for solving the problem is stated as under:
1. Write in a column the running/maintenance costs of machine or equipment for
different years, Rn.
 2. In the next column write the discount factor indicating the present value of a rupee
received after (i-1) years,

3. The two column values are multiplied to get present value of the maintenance costs,
i.e., .
4. These discounted maintenance costs are then cumulated to the ith year to get .

5. The cost of machine or equipment is added to the values obtained in Step 4 above to

Obtain C+ .

6. The discount factors are then cumulated to get .

7. The total costs obtained in (Step 5) are divided by the corresponding value of the
accumulated discount factor for each of the years.

8. Now compare the column of maintenance costs which is constantly increasing with the
last column. Replace the machine in the latest year that the last column exceeds the
column of maintenance costs.

Example 4: A milk plant is offered an equipment A which is priced at Rs.60,000 and the costs of
operation and maintenance are estimated to be Rs.10,000 for each of the first 5 years, increasing
every year by Rs. 3000 per year in the sixth and subsequent years. If money carries the rate of
interest 10% per annum what would the optimal replacement period?

Solution:
Table 13.4 Determination of optimal replacement period
At the end Operating & Discounted Discounted Cumulative Discounted total Cumulative Weighted
of year maintenance factor operation & Discounted cost discounted average
(n) cost maintenance operation & factor annual cost
Rn maintenance
cost
cost

(1) (2) (3) (4)=(2)x(3) (5) (6)=(5)+60000 (7) (8)=(6)+(7)

1 10000 1.0000 10000.00 10000.00 70000.00 1.00 70000.00

2 10000 0.9091 9091.00 19091.00 79091.00 1.91 41428.42
3 10000 0.8264 8264.00 27355.00 87355.00 2.74 31933.83
4 10000 0.7513 7513.00 34868.00 94868.00 3.49 27207.75
5 10000 0.6830 6830.00 41698.00 101698.00 4.17 24389.18
 6 13000 0.6209 8071.70 49769.70 109769.70 4.79 22913.08
7 16000 0.5645 9032.00 58801.70 118801.70 5.36 22184.36
8 19000 0.5132 9750.80 68552.50 128552.50 5.87 21905.89
9 22000 0.4665 10263.00 78815.50 138815.50 6.33 21912.82
10 25000 0.4241 10602.50 89418.00 149418.00 6.76 22106.52

From Table, we find the weighted cost is minimum at the end of 8th year, hence the equipment
should be replaced at the end of 8th year.
Example 5 A Manufacturer is offered two machines A and B. Machine A is priced at Rs. 5000
and running cost is estimated at Rs. 800 for each of the first five years, increasing by Rs. 200 per
year in the sixth and subsequent years. Machine B, with the same capacity as A, costs Rs. 2500,
but has running cost of Rs. 1200 per year for six years, thereafter increasing by Rs. 200 per year.
If money is worth 10% per year, which machine should be purchased? (Assume that the
machines will eventually be sold for scrap at a negligible price).
Solution
Since money is worth 10% per year, therefore discount rate is

Computation of weighted average cost for machine A

At the Operating & Discounted Discounted Cumulative Discounted Cumulative Weighted
end of maintenance factor operation & Discounted total cost discounted average
year cost maintenance factor annual cost
operation &
(n) Rn
cost maintenance
cost
(1) (2) (3) (4)=(2)x(3) (5) (6)=(5)+ (7) (8)=(6)+(7)
5000
1 800 1.0000 800 800 5800 1 5800
2 800 0.9091 727 1527 6527 1.9091 3419.035
3 800 0.8264 661 2188 7188 2.7355 2627.819
4 800 0.7513 601 2789 7789 3.4868 2233.98
5 800 0.6830 546 3336 8336 4.1698 1999.098
6 1000 0.6209 621 3957 8957 4.7907 1869.61
7 1200 0.5645 677 4634 9634 5.3552 1799.025
8 1400 0.5132 718 5353 10353 5.8684 1764.13
9 1600 0.4665 746 6099 11099 6.3349 1752.043
10 1800 0.4241 763 6862 11862 6.759 1755.053
 From table, we conclude that for machine A 1600<1752.043<1800. Since the running cost of
9th year is 1600and that of 10th year is 1800 and 1800>1752.043, it would be economical to
replace machine A at the end of nine years.
Computation of weighted average cost for machine B
At the Operating & Discounted Discounted Cumulative Discounted total Cumulative Weighted
end of maintenance factor operation & Discounted cost discounted average
year cost maintenance operation & factor annual cost
(n) Rn maintenance
cost
cost

(1) (2) (3) (4)=(2)x(3) (5) (6)=(5)+ (7) (8)=(6)+(7)

2500
1 1200 1.0000 1200.00 1200.00 3700.00 1.00 3700.00
2 1200 0.9091 1090.92 2290.92 4790.92 1.91 2509.52
3 1200 0.8264 991.68 3282.60 5782.60 2.74 2113.91
4 1200 0.7513 901.56 4184.16 6684.16 3.49 1916.99
5 1200 0.6830 819.60 5003.76 7503.76 4.17 1799.55
6 1200 0.6209 745.08 5748.84 8248.84 4.79 1721.84
7 1400 0.5645 790.30 6539.14 9039.14 5.36 1687.92
8 1600 0.5132 821.12 7360.26 9860.26 5.87 1680.23
9 1800 0.4665 839.70 8199.96 10699.96 6.33 1689.05
10 2000 0.4241 848.20 9048.16 11548.16 6.76 1708.56

In table, we find that 1800<1689<2300 so it is better to replace the machine B after 8th year. The
equivalent yearly average discounted value of future costs is Rs. 1748.60 for machine A and it is
1680.23for machine B. Hence, it is more economical to buy machine B rather than machine A.

Replacement of items that fail completely and suddenly

A system generally consists of a huge number of low-priced components that are increasingly
liable to failure with age. Electronic items like bulbs, resistors, tube lights etc., generally fail all
of a sudden, instead of a gradual deterioration. The sudden failure of the item results in complete
breakdown of the system. The system may contain a collection of such items or just an item like
a single tube light. The costs of failure, in such a case will be fairly more than the cost of the
item itself. In addition, the value of the failed item is so small that the cost of keeping records of
individual ages cannot be justified. For example, a tube or a condenser in an aircraft costs little,
but the failure of such a low cost item may lead the airplane to crash. Hence we use some
replacement policy for such items which would minimize the possibility of complete breakdown.
The following are the replacement policies, which are applicable for this situation.
(i) Individual replacement policy in which an item is replaced immediately after it fails.
(ii) Group replacement policy is concerned with those items that either work or fail
completely. In this policy, a decision is made as regard to at what equal

intervals, all the items are to be replaced simultaneously irrespective of whether they have
failed or not, with a provision to replace the items individually, which fail during the fixed
group replacement period‟. There is a trade-off between the individual replacement policy
and the group replacement policy. Hence, for a given problem, each of the replacement
policies is evaluated and the most economical policy is selected for implementation. The
optimal period of replacement is determined by calculating the minimum total cost. The total
cost is calculated using:
probability of failure at time t
number of items failing during time t
cost of group replacement and the cost of individual replacement.

Other replacement problems

Apart from industrial replacement problems, replacement principles are also applicable to the
problems of recruitment and staff promotion. In staffing problems, with fixed total staff and
fixed size of staff groups, the proportion of staff in each group determines the promotion age,
unemployment situations now-a-days can be considerably improved by the possibility of
expansion. In the organizations where staff frequently float away, applying probability
concepts it is possible to determine number of candidates to be recruited every year so as to
maintain constant workforce in the organization. Attempts were made to determine the
number of staff to be recruited every year to maintain constant size of teaching staff in
Engineering College where the staff are observed floating heavily, by a model using
probability concepts which can also give promotion age for the new entrants.
Maintenance

Maintenance is a routine activity of keeping an equipment or a machine or a facility in its normal

working condition so that it can perform its intended function satisfactorily without causing any
loss to the service time on account of its breakdown”. Maintenance is any activity designed to
keep the resources in good working condition or restore them to operating status. The significant
resource used to add value to products is the equipment or machinery. Therefore, the machinery
should be maintained in good working state. If not, there may be too much down time and break
for production, if the machinery is a part of an assembly line. Improper functioning of equipment
may lead to issues related to quality. So, it would be good if the equipment or machinery are
always maintained in working condition with minimum possible cost. Therefore, minimization
of overall maintenance cost needs a wholistic approach. Sometimes the machinery may be
outdated over a time horizon. If an organization or company wishes to continue competitive
business, it is essential to look at whether to maintain with the existing (old) machinery or to
replace considering the costs of operations and maintenance. Maintenance activities pertaining to
facilities and equipment in good working condition are indispensable to achieve specified level
of quality, reliability and efficient working. Maintenance activity helps in maintaining and
increasing the operational efficiency of equipment or facilities and, thus, contributes to revenue
by reducing the operating costs and increasing the effectiveness of production.

Need for maintenance

Maintenance is a function to keep the equipment or machinery in their normal operating

condition by servicing or repairing or replacing some of the components”. The concept of
maintenance is to prepare a plan of action regarding the steps to be followed while carrying out a
particular maintenance activity. Based on history of equipment and the feedback obtained from
users, concrete procedures for maintenance are developed and together called “maintenance
policies”, the development of which requires manufacturer-user interaction. As a result, the
manufacturer may redesign the equipment as maintenance requirements of the user. The basic
need for maintenance of any equipment or machinery is to:
1. Minimize the frequency of interruptions to production by reducing breakdowns.
2. Maximize the production capacity from the given equipment resources.
3. Enhance the safety of work force. 4. Enhance the service reliability of equipment.
4. Enhance the service reliability of equipment.
5. Enable to achieve the quality of a product or service through well-maintained equipment.
6. Maximize the useful life of the equipment.
7. Reduce the repair or breakdown cost component in the total production cost.
Objectives of maintenance

In order to accomplish the goals of the organization, the objectives of maintenance must be set
within the framework of the organizational structure. Therefore, it is essential for the
maintenance section to make sure that:
a) Equipments are in good working condition at lowest running cost possible.
b) Delivery schedules are not changed because of unavailability of equipment in good operating
condition.
c) The equipments‟ performance is reliable.
d) Equipment is maintained to minimum breakdowns.
e) Equipment‟s life is extended.

As the activity of maintenance adds some more cost to the running cost besides improving the
performance of the equipment and availability in optimum working condition, “establishing a
balance between the availability and overall running costs should be objective of maintenance
work”. Therefore, ensuring the availability of equipment’s for maximum time at minimal cost is
the responsibility of the maintenance function. Hence, depart mentation or creation of various
sections is done in industries, now-a-days, to take care of the maintenance activities of
equipment.

Types of maintenance

Martand Telsang (1998) classified the maintenance activity into two types:

i) Planned Maintenance
ii) Unplanned Maintenance

Planned maintenance

This is an organized type of maintenance work carried out as per recorded procedures
having control. To evade breakdowns, the maintenance tasks are preplanned considering,
when and what kind of the maintenance works and who would take up the maintenance
work. To meet the requirements of the planned maintenance, „Work Study‟ has to be carried
out to decide the cycle time of maintenance and conducting the „Time Study‟ may also be
helpful and suggestive for developing economical maintenance schedules for the equipments.
Preventive maintenance: The preventive maintenance policy is a system of planned and
scheduled maintenance with the aim of minimizing or preventing breakdowns. Preventive
maintenance is “the utilization of planned and coordinated inspections, repairs, adjustments,
and replacements in maintaining an equipment or plant”. The premise behind the preventive
maintenance is that “prevention is better than cure”. Preventive Maintenance (PM) is “the
periodical inspection and service activities, which are aimed to detect potential failures and
perform minor adjustments or repairs, which will prevent major operating problems in
future”. One of the main objectives of preventive maintenance is to detect any condition that
may cause failure of the machine before such breakdown occurs. This system makes it
possible to plan and schedule the maintenance tasks with no disturbance in production
schedule and hence improves the equipment availability. All the components or at least the
critical elements of the equipment will be systematically inspected at predetermined time
intervals to disclose the situation that may lead to production break and unsafe 9
depreciation. In general preventive maintenance plan is not readily available to outfit any
industry. To make it appropriate to the needs of an organization it must be custom-made.
Preventive maintenance includes Failure analysis and planning for their elimination. As
preventive maintenance replaces the weak components identified during the inspection, its
planning and execution is expensive. Preventive maintenance is suitable where the
occurrence of operational risk because of equipment‟s failure must be avoided. However,
maintenance costs get compensated in terms of extended life of equipment. By and large, this
system is put into action in complex plants to evade grave breakdowns. Scheduled
Maintenance is one type of preventive maintenance.

a) Scheduled maintenance: In this system, maintenance schedule is prepared consulting

the manufacturing division so that particular machine / part of the process can be
undertaken for maintenance task. By deciding the maintenance frequency in advance with
experience, the equipment‟s idle time, the maintenance work force can be effectively
utilized and also the experts will be made readily available for executing maintenance.
The scheduled maintenance improves the equipment‟s availability, even though it
appears to be costly compared to breakdown maintenance. Scheduled maintenance is
generally used to overhaul the equipment. There are two types of preventive maintenance
schedules. i) Firm Schedule or Fixed Time Maintenance Schedule Most of preventive
maintenance schedules are of firm schedules. Workload cycles will be scheduled for
different time durations like: daily, weekly, biweekly, monthly, bimonthly, quarterly,
half-yearly, or yearly etc., Crew carrying out

preventive maintenance jobs should normally be separate from crew attending breakdowns.
During the equipment‟s lifetime, the frequency of schedule will not be same. Failure rates
 are high during initial stage that is just after commissioning, and are low during useful period
/ normal working period and once again high towards the end of the working cycle that is just
before the discard of equipment or before major over hauling. ii) Condition Based
Maintenance (CBM) In this method, the condition of the equipment or some critical parts of
the equipment are continuously monitored using sophisticated monitoring instruments so that
the failure may be predicted well before it occurs and corrective steps are taken to prevent
failure. Predictive maintenance is more feasible today because of technology that available
for equipment surveillance and diagnosis of problems while the machines are still operating.
The condition of a machine can be monitored by several means. Sensors may be installed, or
periodic readings may be taken with portable units to measure vibration or temperature.
Vibration sensors and ultrasonic sensors are used to feed data in to a computer for analysis.
Tie deviation from the normal vibration pattern are recorded when the machine is running
properly are analyzed to determine where the problem is developing and when it will become
serious. A problem of this type prevents unplanned downtime that disrupts production
schedules. The objectives of condition-based maintenance are:

 machines To detect the failures before they occur.

 To carry out maintenance only when required.
 To reduce the maintenance costs and downtime costs.

The methodology of Condition Based Maintenance

1. Proper identification and location of /equipments by codification.

2. Selection of critical machines and systems.

3. Identifying components/elements, which are failure prone.

4. Fixing condition parameters.

5. Monitoring techniques.

6. Monitoring schedule and frequency.

7. Trend monitoring.

8. Repair schedule and execution.

9. Follow up

Benefits of condition monitoring

 Increased system availability

 Improved plant operation and safety

 Improved maintenance

 Improved product quality

b) Corrective maintenance

It is one type of planned maintenance and can be defined as “the practice carried out to restore
the full performance of the equipment that has stopped working to acceptable standards. For
instance, an engine may be in working condition, but does not make its full load because of
worn–out piston rings. Thus, if the piston rings are replaced, it will bring back the performance
of the engine to specified level”. Corrective Maintenance, if properly implemented will result in
reduction of maintenance costs and equipments‟ downtime as well.

Restoration of failed units is the primary intention of corrective maintenance, which is a one
stretch job that must be fully completed once the activity is engaged. Corrective maintenance
accentuate in getting complete information of every breakdown and the reason for each. Efforts
are made to identify and eliminate the cause by activities such as improving maintenance
practices, changing frequency of maintenance services and improving process control
procedures. The use of planned preventive maintenance gives out a clear picture regarding the
recurring failures of a particular component of an equipment such that the recurrence can be
avoided and also informed to the manufacturer to incorporate changes in the design of
equipments.
Maintainability

Maintainability is a built-in design and installation characteristic that provides the resulting
equipment or product with an inherent ability to be maintained, leading to factors such as better
mission availability and lower maintenance cost, required tools and equipment, required skill
levels, and required man-hours. In contrast, reliability is a design characteristic that leads to
durability of the equipment as it performs its assigned function according to a specified condition
and time period. It is accomplished through actions such as choosing optimum engineering
principles, testing, controlling processes, and satisfactory component sizing.

Maintainability function

Just like in any other area of engineering, probability distributions play an important role in
maintainability engineering. They are used to represent repair times of equipment, systems, and
parts. After identification of the repair distribution, the corresponding maintainability function
may be obtained. The maintainability function is concerned with predicting the probability that a
repair, beginning at time t = 0, will be completed in a time t. Mathematically, the maintainability
function is defined as follows

where t is time, fdr (t) is the probability density function of the repair time, and M (t) is the
maintainability function.

Maintainability function for exponential distribution

Ex.1 Assume that the repair times of a mechanical system are exponentially distributed with a
mean value of 5 hours. Calculate the probability of completing a repair in 6 hours.

Solution:

This means there is a likelihood of approximately 70% that the repair will be completed within 6
hours.
Maintainability function for weibull distribution

Maintainence Policy:

 Maintenance policy ensures that equipments are always in ready and reliable condition.
This ensures company is able respond to any sudden change in demand.

 Maintenance policy ensures that equipments are always calibrated to provide good-
quality products and competitive advantage. This ensures that there are no sudden and
frequent breakdowns and reduce production of defective products.

 Maintenance policy ensures that there are no major breakdowns. This ensures there is no
lose of inventory or market share for companies following JIT philosophy.

 Maintenance policy ensures that costs are always controlled.

 Maintenance policy is particularly important in capital-intensive industries.

If organizations are not able to implement an effective maintenance policy than it can result in
the following results:

 Full capacity utilization may not be achieved.

 Increase in production cost as fixed labor cost cannot be reduced.

 Increase in maintenance cost as more spare parts are required.

 Reduction in product quality and increase in wastage.

 Safety of workers and operators in jeopardy.