Replacement Process Analysis.

This report describes current work on Replacement Process Analysis. First, the importance of the actuarial method in replacement process is discussed. Some refinements of the actuarial method for renewal processes are reviewed. A Markovian representation for this method gives the actuarial method a powerful tool for obtaining distributions of replacements. Also extensions of this method to used engines are proposed. A Markovian model has been formulated for engine life distribution conditioned on the number of prior repairs. This model introduces dependency among the replacements and thus allows the quality of a replacement engine to vary in some sense. Unfortunately a regression analysis on engine type TF33P7 for a related project shows low correlation between the engine life and the number of prior repairs. However more statistical evidence should be gathered before abandoning this model. Finally, the effect on replacements of the randomness in flying hours among aircraft is formulated but the problem has not been solved yet.