This thesis is concerned with preventive maintenance policies for systems subject to two types of failures : type 1 failure which can be corrected by minimal repair and type 2 failure which can be removed only by replacement. In many situations, the efficiency of an operating system declines with age because of wearout of the system. In these cases, it is desirable to consider the declining efficiency in planning the maintenance policies.
Two preventive maintenance models are developed which include an earning-loss term reflecting the loss in efficiency. The decision variables are time in Model A and number of minimal repairs in Model B. A policy is defined to be optimum if it minimizes the expected average cost per unit of time over infinite time span.
The sufficient condition for the existence of a unique optimal policy is derived and sensitivity analyses for various cost factors are performed. Model A is compared with other models and some numerical examples are given.