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A combined overhaul/replacement policy is developed for a class of deteriorating equipment, where operating costs increase with age. It is assumed that the effect of an overhaul is to reduce these costs by a fIxed amount, from the time of overhaul onwalds. Two possible assumptions as to the dependence of overhauling effects on equipment age and two functional forms of this dependence are explored. Discounting considerations are omitted from the analysis and the possible effect of this omission on outcomes is investgated.

COMBINED OVERHAUL AND REPLACEMENT POLICIES FOR DETERIORATING EQUIPMENT