In this paper we generalize the minimal repair replacement model introduced by Barlow and Hunter (1960). We assume that there is available information about the underlying condition of the system, for instance through measurements of wear characteristics and damage inflicted on the system. We assume furthermore that the system failure rate and the expected cost of a repair/replacement at any point of time are adapted to this information. At time t = 0 a new system is installed. At a stopping time T, based on the information about the condition of the system, the system is replaced by a new and identical one, and the process is repeated. Failures that occur before replacement are rectified through minimal repair. We assume that a minimal repair changes neither the age of the system nor the information about the condition of the system. The problem is to find a T which minimizes the total expected discounted cost. Under appropriate conditions an optimal T is found. Some generalizations and special cases are given.
