1. The Optimal Replacement Interval for Components of Equipment Dr. Chi-Chao Liu Department of Business Administration 6/15/2007

2. The Optimal Replacement Interval for Components of Equipment 2 Outlines Introduction — Weibull Analysis(5’) Pareto Diagram(1’) Data Collection & Analysis(2’) Results(2’) Sensitive Analysis(2’) Summary & Conclusions(2’) Suggestions for Future Work(1’)

3. The Optimal Replacement Interval for Components of Equipment 3 Weibull Analysis Waloddi Weibull invented the distribution in 1937 and delivered this hallmark paper in 1951 by ASME. Weibull claimed that the data could select the distribution and fit the parameters. Leonard Johnson (GM) & Dorian Shainin applied and improved the technique. The USAF recognized the merit and funded his research until 1975.

4. The Optimal Replacement Interval for Components of Equipment 4

5. 5 Weibull Analysis Robert Abernethy (Pratt & Whitney) found that the Weibull method worked with extremely small samples. Advanced techniques such as failure risk predictions, substantiation test designs and Weibayes Dauser Shift were developed. Today, Weibull analysis is the leading method in the world for fitting life data.

6. The Optimal Replacement Interval for Components of Equipment 6 Weibull CDF

7. The Optimal Replacement Interval for Components of Equipment 7 Median Rank Regression

8. The Optimal Replacement Interval for Components of Equipment 8 Weibull Analysis

9. The Optimal Replacement Interval for Components of Equipment 9 Optimal Replacement Interval I w (t)= Cost per unit time C a = Cost of replacement after failed C b = Cost of replacement before failed

10. The Optimal Replacement Interval for Components of Equipment 10 Data Collection and Analysis Bearings

11. The Optimal Replacement Interval for Components of Equipment 11 Results

12. The Optimal Replacement Interval for Components of Equipment 12 Data Collection and Analysis O-rings

13. The Optimal Replacement Interval for Components of Equipment 13 Results

14. The Optimal Replacement Interval for Components of Equipment 14 Sensitive Analysis

15. The Optimal Replacement Interval for Components of Equipment 15 Sensitive Analysis

16. The Optimal Replacement Interval for Components of Equipment 16 Summary & Conclusions 1.The optimal model can only be applied for wear out period. 2.The optimal replacement interval of the components will be found only if unplanned cost is greater than planed cost. 3.It is necessary to collect components’ life data for a long period of time to establish one’s own data bank. 4.Based on the optimal model mention above, considering cost and reliability factors, it is easy to choose one or two key component suppliers for a long term purchase cooperation, which will be beneficial for price negotiation, and keeping components in stable quality. 5.The sensitive analysis is useful in helping the managements make a decision when the unplanned cost is uncertain.

17. The Optimal Replacement Interval for Components of Equipment 17 Suggestions for future work 1.Unplanned costs are full of uncertainty. Hence, data collections for unplanned costs are suggested for further study.. 2.The field data should be returned to the suppliers’ R&D department to redesign their components and improve their reliability if the components do not meet their requirements. Further study is desired here.

18. The Optimal Replacement Interval for Components of Equipment 18 Q & A Thank You for Your Attention!