The marginal cost analysis and its application to repair and replacement policies

Research output: Contribution to journalArticlepeer-review


The concern of this paper is twofold: (i) elaboration on the role of the marginal cost analysis (MCA) method in the study and optimization of maintenance policies; (ii) the study of a repair and replacement policy where the decision whether to repair a failed item or replace it is based on the repair costs: those encountered now and those anticipated in the future (the policy is an extension of another one which bases this decision solely on the present repair costs). The situation of incomplete information on the underlying life distribution is also considered in which case a Bayesian inference procedure is associated to the failure process and its results incorporated into the repair or replace decision process at failures. These two goals are interlinked in that on one hand the repair and replacement policy is analyzed and optimized by using the MCA, and on the other hand this provides yet another illustration for the application of the MCA and its adaptability to model and policy generalizations.

Original languageEnglish
Pages (from-to)214-224
Number of pages11
JournalEuropean Journal of Operational Research
Issue number2
StatePublished - 20 Apr 1995


  • Bayesian inference (for a process)
  • Maintenance
  • Marginal cost analysis
  • Repair and replacement policies

ASJC Scopus subject areas

  • General Computer Science
  • Modeling and Simulation
  • Management Science and Operations Research
  • Information Systems and Management


Dive into the research topics of 'The marginal cost analysis and its application to repair and replacement policies'. Together they form a unique fingerprint.

Cite this