Optimal condition based maintenance with imperfect information and the proportional hazards model

Condition based maintenance (CBM) is based on collecting observations over time, in order to assess equipment's state, to prevent its failure and to determine the optimal maintenance strategies. In this paper, we derive an optimal CBM replacement policy when the state of equipment is unknown but can be estimated based on observed condition. We use a proportional hazards model (PHM) to represent the system's degradation. Since equipment's state is unknown, the optimization of the optimal maintenance policy is formulated as a partially observed Markov decision process (POMDP), and the problem is solved using dynamic programming. Practical advantages of combining the PHM with the POMDP are shown.