Intl. Trans. in Op. Res.

14 (2007) 547563

INTERNATIONAL
TRANSACTIONS
IN OPERATIONAL
RESEARCH

Scheduling preventive maintenance for oil pumps using

generalized proportional intensities models
David F. Percya and Babakalli M. Alkalib
a

Centre for Operational Research and Applied Statistics, University of Salford, Greater Manchester, M5 4WT, UK,
b
Department of Management Science, University of Strathclyde, 40 George Street, Glasgow G1 1QE, UK
E-mail: d.f.percy@salford.ac.uk [Percy]
Received 1 September 2005; received in revised form 1 February 2007; accepted 17 June 2007

Abstract
Percy and Alkali presented generalizations of the proportional intensities model introduced by Cox. They
identied several features of these models that are particularly relevant for modelling complex repairable
systems subject to preventive maintenance ( PM). These include the baseline intensity, scaling factors and
explanatory variables. We investigate these aspects in detail and apply the models to ve sets of reliability
data collected from the main pumps at oil reneries. We use likelihood methods to estimate the model
parameters and compare how well the models t the data. Our analyses suggest that a log-linear baseline
intensity function performs well and that an exponential deterministic scaling function is useful for
corrective maintenance. The inclusion of explanatory variables to represent the quality of last maintenance
and time since last maintenance also proves to be benecial. We develop algorithms for simulating the
reliability behaviour of a complex repairable system into the future, in order to schedule appropriate
maintenance activities, identifying special cases that simplify the algebra. Applying these methods to the oil
pump data, we derive recommendations for PM plans and demonstrate that adopting this strategy can lead
to substantial savings.
Keywords: complex repairable system; generalized proportional intensities models; preventive maintenance scheduling

1. Generalized proportional intensities models (GPIMs)

Lugtigheid et al. (2004) presented an excellent review of realistic models for repairable systems,
and developed repair and maintenance indicators to describe a systems state and as inputs for
model selection and comparison. One of the most favourable approaches identied is the
proportional intensities model ( PIM) of Cox (1972). This model is based on the nonhomogeneous Poisson process (NHPP), which Ascher and Feingold (1984) regard as the
fundamental model for such systems. Other frequently used models include the virtual age model
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D. F. Percy and B. M. Alkali / Intl. Trans. in Op. Res. 14 (2007) 547563

548

MODELS
Minimal Repair

non-homogeneous
Poisson process

Partial Repair

Rejuvenation

Correction

proportional
hazards model

proportional
intensities model

Maximal Repair

renewal process

Fig. 1. Relationship between models for repairable systems.

and additive arithmetic reduction of intensities model, although neither of these have as natural a
physical interpretation as the PIM. Replacing a worn exhaust pipe does not add six months to a
cars lifetime, as other components are just as old as before, and additive scaling factors can lead
to negative intensities! An important classical paper on the PIM in a reliability context, which also
expands on the engineering principles, is that by Prentice et al. (1981) and some of those ideas are
adopted in the current paper. Further discussion of practical relevance is contained in the book by
Blischke and Murthy (2000). The organization chart in Fig. 1 displays the basic relationships
between established classes of models that are commonly used for repairable systems.
Percy and Alkali (2005) introduced GPIMs as extensions of the PIM, for the particular purpose
of modelling complex repairable systems. GPIMs oer the realistic physical interpretation that
system maintenance modies its subsequent likelihood of failure in a multiplicative manner. In
contrast, the assumption of minimal repairs only applies to systems with many components, the
assumption of maximal repairs only applies to systems with few components and the assumptions
of rejuvenation oer good statistical models that are less easy to justify in a physical sense. We
now explore the specication and application of GPIMs in detail. All these models apply equally
to calendar time or operating time, whichever is deemed more suitable.
If N(t)X0 is the number of events up to and including time tX0 in an orderly stochastic
process, the intensity function is dened by
d
E fN tg:
dt
The NHPP is then dened by the following conditions for 0osot:
it

N0 0
system initialization at time 0;

fNt  Nsg?Ns

independence
of increments;

Rt
iudu
Poisson failure pattern:

fNt  Nsg  Po

GPIMs extend the NHPP by allowing the intensity function to vary piecewise continuously
over time according to the randomly evolving events and intervention history of the process,
equivalent to the reliability and maintenance history of the system in practical applications. An
algebraic representation of a GPIM in terms of its intensity function, for modelling a complex
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D. F. Percy and B. M. Alkali / Intl. Trans. in Op. Res. 14 (2007) 547563

repairable system, is given by

(M t )(N t )
Y
Y
it i0 t
ri
sj expx0 t c:
i1

549

j1

Here, i0(t) represents a baseline intensity function, while ri40 and sj40 are intensity scaling
factors for preventive maintenance ( PM) and corrective maintenance (CM) actions, respectively.
Furthermore, M(t) and N(t) are the total numbers of PM and CM actions in the time interval
(0, t], while xt is a vector of explanatory variables at time t and c is an unknown parameter vector
of regression coecients.

2. Model specication
Percy and Alkali (2005) considered three possible forms of baseline intensity function for GPIMs:

a constant form
i0 t a

for a > 0

a log-linear form
i0 t abt

for a > 0 and b > 0

for a > 0 and b 2 R:

a power-law form
i0 t atb

These oer sucient exibility to model systems that are naturally improving or deteriorating,
and are partly justiable because they correspond to rst event times arising from exponential,
truncated Gumbel and Weibull distributions, respectively. The last of these is particularly
common in reliability analysis, as it corresponds to an extreme value distribution that might be
regarded as representing the rst time to failure of many identical components in a system.
For modifying the intensity function upon events and interventions, scaling factors can take the
forms of positive constants, random variables (stochastic scaling), specied functions of i and j or
of ti and tj (deterministic scaling) or random variables with evolving means (combined scaling).
For example, a suitable stochastic form for scaling factors following CM might assume
conditionally independent exponential random variables
sj js  Exs

for j 5 1 ,2 ,3 , . . . with s40. However, this constrains the mode of sj to be at zero, which is likely
to be a poor assumption. Consequently, better stochastic scaling factors might assume
conditionally independent gamma or log-normal random variables, which are both common
reliability models and for which the mode is greater than zero.
Similarly, suitable deterministic forms for scaling factors following CM might be the increasing
function of time
tj
;
8
sj
tj s
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550

where s40, for which successive repairs have decreasing multiplicative eects on the intensity
function, and the decreasing function of time
sj

s
;
tj s

where s40, for which successive repairs have increasing multiplicative eects on the intensity
function. Both these functions impose the constraint 0osjo1, which implies that CM is eective
in reducing the systems likelihood of failure. If desired, one could conceive of other functions that
allow for ineective CM, with sj40.
Combined scaling is perhaps the most realistic form in practice and connects the stochastic and
deterministic forms illustrated above. For example, CM scaling factors might be exponential
random variables, with means that increase over time as follows:
 
sj js; tj  Ex sj ;

10

where
sj

tj
;
tj s

11

for j 5 1, 2, 3, . . . with s40. All these variations have reasonable practical interpretations and we
investigate the relative performances of these structures in this paper.
The third component of a GPIM is the linear predictor, incorporated as an exponent into the
intensity function so that the multiplier is positive. The corresponding vector of explanatory
variables might include:

Quality of last maintenance action
cost of repair; including downtime; labour and parts;

Time since last maintenance action
allows for structural changes and transient effects;

Condition indicators

12

vibration; wear; noise; viscosity; leakage;

Repair and maintenance indicators
see Lugtigheid et al: 2004:
The choice of which variables to include depends on the sample size (history of failures) and the
results of standard selection procedures based on analyses of deviance for nested models. Only
important predictors should be included in order to produce a robust model. We consider these
issues for the oil pumps application later.
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551

3. Model estimation
In the context of complex repairable systems, process events correspond to PM and CM actions.
Suppose we observe actual event times tk or inter-event times xk 5 tk  tk  1 in the interval (0, T ],
with corresponding censoring indicator variables ck where


0 no failure at time tk PM;
ck
13
1 failure at time tk CM;
for k 5 1, 2, . . ., n where n 5 M(T)1N(T) and t0 5 0. The likelihood function is given by
8 T
9
(
)
n  
< Z
=
Y
ck
exp  itdt ;
i t
Lfi; H T g /
k
:
;
k1

14

where the vector i denotes all the unknown parameters in the intensity function; see Crowder et al.
(1991). For example, suppose we assume a GPIM with a log-linear baseline intensity function of
the form in Equation (5), deterministic scaling factors for PM of the form
r
15
ri
ir
for i 5 1, 2, 3, . . ., where r40 and stochastic scaling factors for CM of the form in Equation (7). In
this case, the parameter vector is given by i 0 5 (a, b, r, s, c).
The log likelihood function for the general formulation is
l fi; H T g constant

n
X

 
ck log i t
k 

k1

ZT

itdt

16

and hence, substituting the intensity function of Equation (3), the GPIM log likelihood
becomes
8
9
M t
N t
n
<
=
k
X
Xk
X
 
ck log i0 tk
log ri
log sj x0 tk c
l fi; H T g constant
:
;
i1
j1
k1

8
n <
X

M
tk
Y

:
k0

i1

!
ri

NY
tk
j1

! Ztk1
sj
tk

9
=
0
i0 t expx t cdt ;
;

17

where we dene tn11 5 T to allow for any observation of the process beyond the last event. Percy
and Alkali (2005) noted that the integral can be evaluated analytically for the baseline intensity
functions in Equations (4)(6) when the explanatory variables are constant between successive
events, such as severity of last failure and quality of last maintenance action. Otherwise, simple
numerical quadrature might be necessary.
For situations involving stochastic or combined PM or CM scaling factors, we proceed as
follows: if the scaling factors r and s are observable and data on them are available, then the
log likelihood is directly l{i; H(T), r, s} 5 l{a, b, c; H(T), r, s}. Otherwise, we need to consider
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552

integrated likelihoods. In the above example, we assumed stochastic CM scaling factors and hence
the log likelihood for this case would be determined as
l fi; H T g l fa; b; r; s; c; H T g
Esjs l fa; b; r; c; H T ; sg
Z
l fa; b; r; c; H T ; sgf sjsds;

18

where the integral is evaluated over the real space of dimension N(T). Even though conditionally
independent assumptions enable us to express the joint density as a product of marginal
densities
f sjs

NY
T

 
f sj js ;

19

j1

the multiple integral in Equation (18) is dicult to solve analytically and hence we recommend
using a Monte Carlo approximation. This is achieved by generating many, m, pseudo-random
vectors s(1), s(2), . . ., s(m), which are readily available from standard univariate simulation
algorithms using Equation (19), and then evaluating
l fa; b; r; s; c; H T g 

m n
o
1X
l a; b; r; c; H T ; si :
m i1

20

This approximation can be made as accurate as desired by increasing the value of m.

4. Modelling application
Kobbacy et al. (1997) published a set of system reliability data collected from a main pump (A) at
an oil renery over a period of nearly seven years. Percy and Alkali (2005) analysed these data
when introducing simple forms of GPIM, which assume constant and equal scaling factors for
both PM and CM. Similar data were collected from four other pumps (B, C, D and E) and have
been discussed in technical reports by Ascher et al. (1999, 2000) but not published. Each of these
pumps performs the same function but the working conditions are dierent. For example, their
pumping rates vary with time and their maintenance crews are dierent. We present all these data
in the Appendix for a comparative analysis using GPIMs, although we concentrate on modelling
pump A in order to select an appropriate baseline intensity function, assess the inuence of using
deterministic and stochastic CM scaling factors and evaluate the eects of including simple
explanatory variables.
Of particular interest in this section is a comparison of dierent types of CM scaling factors. We
initially consider four deterministic functions, which assume eective CM as 0osjo1. The rst
two of these are complementary functions of the CM number, j, and the second two are
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553

Table 1
Estimated log likelihoods for generalized proportional intensities models (GPIM) analysis of pump A data
Baseline intensity function
Estimated log likelihood
CM scaling factors

Constant
(21)
(22)
(23)
(24)

Constant

Log-linear

Power-law

 215.5
 212.6
 218.4
 212.7
 218.4

 211.7
 212.3
 218.0
 212.0
 218.0

 215.1
 212.6
 216.9
 212.7
 216.9

corresponding functions of the CM time, tj, as follows:

sj expjs;

21

sj 1  expjs;


sj exp tj s ;


sj 1  exp tj s ;

22
23
24

Restricting the parameter s to be a positive real number, (21) and (23) are strictly decreasing
functions, indicating that CM becomes more eective over time, whereas (22) and (24) are strictly
increasing functions, indicating that CM becomes less eective over time.
We compare the goodness of t for these models with previous results using the estimated log
likelihood and present the results in Table 1, assuming that PM scaling factors are equal to an
unknown constant r. Larger values (closer to zero) for the estimated log likelihood indicate better
ts to the observed data. The results clearly demonstrate that deterministic CM scaling functions
(21) and (23) are more appropriate for this system than (22) and (24), indicating that CM becomes
more eective over time. However, the GPIM with a log-linear baseline intensity function and
constant CM scaling factors is the best of these models.
As the log-linear baseline intensity function yields larger estimated log likelihoods for constant
CM scaling factors and for functions (21) and (23), we now restrict attention to this form for a
more detailed GPIM analysis of pump A data. First, we consider extended formulations of
deterministic CM scaling functions (21) and (23), to allow greater exibility:
sj y expjs f;


sj y exp tj s f:

25
26

Second, we consider two forms of stochastic CM scaling functions as recommended in Section 2.

One of these is a gamma form
 


ba a1
sj exp bsj ; sj > 0
27
f sj js
Ga
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D. F. Percy and B. M. Alkali / Intl. Trans. in Op. Res. 14 (2007) 547563

Table 2
Estimated log likelihoods for further generalized proportional intensities models (GPIM) analysis of pump A data
CM scaling factor

Estimated log likelihood

Deterministic (25)
Deterministic (26)
Stochastic (27)
Stochastic (28)
Combined (28, 21)
Combined (28, 23)
Combined (28, 25)
Combined (28, 26)

 211.4
 211.7
 215.2
 211.9
 216.6
 213.8
 211.6
 211.9

 
for j 5 1, 2, 3,. . ., where
s
represents
the
mean
E
sj js a=b and we arbitrarily set the standard
p
deviation SD sj js a=b to be one-third of the mean, giving a 5 9 and b 5 9/s. The other of
these stochastic CM scaling functions is a log-normal form
(

)
 
1
1 log sj  a 2
; sj > 0
28
f sj js p exp 
2
b
sj b 2p
 


for j 5 1, 2, 3, . . ., where s again represents the mean E sj js exp a b2 =2 and we again
p

 
arbitrarily set the standard deviation SD sj js exp2a b2 fexpb2  1g to be one-third of
p
p
the mean, giving a log3s= 10 and b log10=9.
Finally, we consider four combined forms for CM scaling factors, based on the log-normal
probability density function in Equation (28) together with deterministic functions (21), (23), (25)
and (26) for describing the evolving mean of this distribution over time. We choose these
particular combinations, as their constituent parts are the most promising based on empirical
evidence. The corresponding model assumption is that CM scales the intensity function by a
factor that is a random observation from the log-normal distribution specied by Equation (28).
p
  p
Now, though, the parameters are dened by a log 3sj = 10 and b log10=9 where, for
the deterministic function of Equation (21), sj 5 exp(  js) for j 5 1, 2, 3, . . . in terms of an
unknown parameter s. Similar modications to Equations (23), (25) and (26) yield the other
combined scaling factors.
Our results are presented in Table 2, again in the form of estimated log likelihoods. These
models all assume a log-linear baseline intensity function and do not include exploratory
variables. The rst of these, which assumes deterministic CM scaling of the form in Equation (25),
gives the best t of all the models considered here so far. However, it is only marginally better
than the equivalent model that assumes CM scaling factors to be constant and equal; see Table 1.
This slight improvement is not surprising, because the models are nested.
The stochastic and combined CM scaling factor results appear to be reasonable, but no better
than simpler formulations. As these concepts seem to be particularly suitable for practical
applications, their mediocre performance is likely due to a lack of information in the data so far
available and requires further investigation. Other improvements are possible by introducing
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Table 3
Generalized proportional intensities models (GPIM) analysis of data for pumps A, B, C, D and E

Oil pump

Estimated
log likelihood

^a

^
b

^
r

^
s

^
y

^
f

A
B
C
D
E

 211.4
 150.3
 305.3
 88.1
 88.4

4.63  10  3
5.90  10  3
1.21  10  2
6.79  10  3
4.23  10  3

1.01
1.00
1.00
1.01
1.00

0.87
1.30
1.13
0.40
1.34

1.99  10  3
3.22  10  10
2.28  10  3
9.38  10  26
2.13  10  10

0.81
0.75
1.00
1.09
0.93

1.09  10  3
2.22  10  4
9.51  10  6
3.13  10  3
1.08  10  2

explanatory variables into these models. For illustration, we consider two covariates, representing
the quality of the last maintenance action and the time since the last maintenance action. For the
best of the models in Table 1, the estimated log likelihood increases to  209.5. For the best of the
models in Table 2, it increases to  209.4, which is slightly better but the dierence is negligible.
Clearly, further research is needed to assess whether other variations of GPIMs can oer benets
for these and other data sets.
For the above analysis of pump A data, the best-tting model of those considered assumes a
log-linear baseline intensity function and deterministic CM scaling factors (25). Temporarily
omitting the explanatory variables for simplicity, Table 3 presents the estimated log likelihoods
and parameter estimates when this model is tted to the data from all ve oil pumps. As before, a
and b are the scale and shape parameters of the log-linear baseline intensity function in Equation
(5), r is the constant PM scaling factor and s, y and f are the parameters representing the
deterministic CM scaling factors in Equation (25).
One important observation is that some parameter estimates are very small or very close to
one and hence are sensitive to the accuracy of computation. This could be avoided by selecting a
more appropriate scale of time measurement, such as weeks or years rather than days. Another
^ o1 for pumps A and D, suggesting
important observation is that the parameter estimate r
^ > 1 for the other three pumps and
that PM might be benecial for these pumps, whereas r
so they might not benet from PM. In the rst instance, we would recommend substantially
decreasing the frequency of PM for pumps B, C and E, thereby avoiding unnecessary
expenditure.

5. PM scheduling
Having established that PM appears to be eective for pumps A and D, we now consider how to
determine the recommended frequency of PM activities and how to calculate the expected cost
savings by adopting this strategy. Analytical progress in this optimization problem is very limited
due to the intractable algebra involved. Our approach to scheduling PM activities is to simulate
the future reliability and maintenance pattern of the repairable system up to an appropriate,
specied nite horizon under dierent PM scenarios. In each case, we evaluate the total cost for
each of the many repetitions and so determine the sample mean as an estimate of the expected
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total cost. Increasing the number of repetitions can enhance the accuracy of this estimate
arbitrarily.
Suppose we want to simulate the time to next failure for an NHPP at time t. To achieve this, we
condition upon the current system age at time t and determine the conditional probability density
function for the time X to the next event, which is given by
8 tx
9
< Z
=
iudu :
29
f xjt; i it x exp 
:
;
t

Extending this to the GPIM, with explanatory variables xt that only vary at events, the
probability density function in Equation (29) becomes
! Nt !
Mt
Y
Y
ri
sj expx0 t c
f xjt; i i0 t x
i1

j1

8 0 tx
9
1
! Nt !
Z
Mt
<
=
Y
Y
 exp @
i0 uduA
ri
sj expx0 t c
:
;
i1
j1

30

0
kt i0 t x exp@kt

Ztx

1
i0 uduA

for known constant

! N t !
M
t
Y
Y
kt
ri
sj expx0 t c:
i1

31

j1

The integral simplies for a constant, log-linear and power-law baseline intensity function,
respectively, to
8
ax;
i0 t a;
>
>
>
>
tx
>
Z
< a
bx  1bt ;
i0 t abt ;
i0 udu log b
32
>
>


>
t
> a
>
t xb1  tb1 ; i0 t atb :
:
b1
For the constant baseline intensity function, the conditional probability density function for the
time to the next event is therefore given by
f xjt; i kt a expkt ax;

x > 0;

33

which is exponential with parameter kta. We can easily generate a pseudo-random number
from this distribution using the inverse transform method, starting with a readily available
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Probability density

0.75

0.5

0.25

10

Time

Fig. 2. Example of a shifted truncated Gumbel distribution.

pseudo-random uniform U(0, 1) number p (from NAG Fortran routine G05CAF, for example)
and evaluating
1
log p;
34
x
kt a
to give the required value. The NAG Fortran library has an algorithm to perform these
computations directly.
For the log-linear baseline intensity function, Equations (30)(32) give the conditional
probability density function for the time to the next event as




kt a  tx
tx
t
b  b ; x > 0:
f xjt; i kt ab exp 
35
log b
This is a shifted truncated Gumbel distribution, an example of which is displayed in Fig. 2. The
easiest method for generating pseudo-random numbers from this distribution would be to rst
generate values from a suitable Gumbel distribution using standard algorithms, and then to
discard all values in the truncated part and nally to add an appropriate constant to the resulting
values. However, this approach is inecient because of the discarded values. A better method is to
use the inverse transform method again. To do this, note that the cumulative distribution function
corresponding to the probability density function in Equation (35) is
Zx
f ujt; idu
Fxjt; i
1




 Zx
kt a
kt a tu
u
du
b exp 
b
kt ab exp
log b
log b
t

36


kt a  tx
1  exp 
b  bt g;
log b

x > 0;

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Probability density

0.2

0.15

0.1

0.05

10

Time

Fig. 3. Example of a shifted truncated Weibull distribution.

on substituting n 5 bt1u to evaluate the integral. If we set a U(0, 1) pseudo-random number

p 1  F xjt; i and re-arrange Equation (36), we obtain



log b
log p
log b;
37
x log 1 
kt abt
which enables us to generate pseudo-random numbers from the required shifted truncated
Gumbel distribution directly, with no wastage.
Finally, we consider the power-law baseline intensity function. Equations (30)(32) now give
the conditional probability density function for the time to the next event as

o
kt a n
b
b1
b1
t x t
; x > 0:
38
f xjt; i kt at x exp 
b1
This is a shifted truncated Weibull distribution, an example of which is displayed in Fig. 3. Again,
we could generate values from a suitable Weibull distribution using standard algorithms, and then
discard all values in the truncated part and nally add an appropriate constant to the resulting
values. Instead, we again use the inverse transform method, for eciency. To do this, note that the
cumulative distribution function corresponding to the probability density function in Equation
(38) is
Fxjt; i

Zx

f ujt; idu

1

kt a b1
kt a exp
t
b1

 Zx



kt a
b1
du
t u exp 
t u
b1
b


o
kt a n
b1
b1
1  exp 
t x t
;
b1

x > 0

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559

on substituting v 5 t1u to evaluate the integral. If we set a U(0, 1) pseudo-random number

p 1  F xjt; i and re-arrange Equation (39), we obtain

1=b1
b1
b1
log
p

t;
40
x t
kt a
which enables us to generate pseudo-random numbers from the required shifted truncated
Weibull distribution directly, with no wastage.
6. Scheduling application
Having established algorithms for simulating our GPIM into the future, we now apply the
methodology to the oil pump data discussed earlier in order to determine suitable scheduling
strategies for PM. We concentrate on pump A again, as our modelling in Section 4 concluded that
this pump is likely to benet from PM. For an initial analysis, we consider a variety of GPIMs
that gave good ts to the data. This is mainly to assess the robustness of the PM scheduling
recommendations to dierent choices of GPIM. As the log-linear baseline intensity function gave
promising results earlier, we stick with that form here. We consider constant and deterministic
CM scaling factors, as specied in Equation (25), with and without explanatory variables
representing the quality of, and time since, last maintenance.
For this preliminary presentation, we replace all unknown parameters in the selected models by
their maximum likelihood estimates, although we review this approximation in the next section.
We also conduct our simulation studies over a xed time horizon as suggested by Scarf (1997); we
deem ten years to be suitable for this demonstration based on the oil pumps. As system
availability is the primary concern for these renery oil pumps, we set the costs attached to PM
and CM as proportional to the observed mean downtimes for these maintenance actions. Our
simulation runs to determine a cost-eective PM schedule cover nine regular PM intervals: weekly,
monthly, bimonthly, quarterly, biannually, annually, biennially, triennially and quadrennially.
Table 4 presents our simulation results as a means of scheduling PM for pump A. For all these
models, the minimum total cost is achieved with a PM interval of between three and ve weeks.
This robustness adds condence to our use of GPIMs for this analysis, although further investigations are required into the sensitivity of this recommendation and projected costs to the particular
model choice. The cost savings achieved over not performing PM are substantial under three of
the four model assumptions, including the model that ts the data best and whose results are
presented in the last column. Figure 4 presents a graph of this models cost function, which clearly
demonstrates the potential cost savings under this optimal ve-weekly PM scheduling strategy.
7. Bayesian analysis
The PM scheduling analysis in Section 6 assumes that all parameters are approximately equal to
their maximum likelihood estimates. Algebraically, we can express this as
f xjt; i  f xjt;^i:
41
While this assumption is reasonable for large data sets, inaccuracies and errors propagate readily
when modelling with small data sets. The very nature of maintenance and reliability problems is
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D. F. Percy and B. M. Alkali / Intl. Trans. in Op. Res. 14 (2007) 547563

Table 4
Simulation results for scheduling PM of pump A with optimal strategies highlighted
GPIM total cost over 10-year horizon
Constant

Determininstic

PM intervals

Without
explanatory
variables

With
explanatory
variables

Without
explanatory
variables

With
explanatory
variables

Weekly
Two-weekly
Three-weekly
Four-weekly
Monthly
Five-weekly
Six-weekly
Bimonthly
Quarterly
Biannually
Annually
Biennially
Triennially
Quadrennially

2382
1260
930
837
859
1023
1406
2128
2681
3247
3536
3682
3708
3737

2351
1184
805
631
597
555
607
1351
2055
2783
3157
3349
3382
3421

2379
1279
1182
1429
1499
1597
1704
1870
1985
2096
2150
2178
2179
2184

2375
1233
879
732
707
684
754
1416
1964
2468
2707
2828
2845
2870

that failure observations should be avoided and hence such data sets are very often inadequate for
relying upon parameter estimates.
A better approach is to use a Bayesian strategy. In this case, exact inference is based on
simulation of the posterior predictive conditional probability density function for the time to the
next failure. This is given by
Z
42
f fxjt; H T g f xjt; igfijH T gdi;
i

where integration is over all the parameters in i(t) and

gfijH T g / Lfi; H T ggi
43
in terms of the likelihood function in Equation (14) and a prior probability density function g(i).
A Monte Carlo approximation can be used to evaluate the integral in Equation (42) to the desired
accuracy, as
n


1X
44
f x t; ii ;
f fxjt; H T g 
n i1
where the i(i) are pseudo-random parameter vectors generated from the posterior probability
density function in Equation (43).
It remains to propose suitable forms for the subjective prior density g(i). Percy (2004) proposed a
good working rule that assumes prior independence of parameters with beta, gamma and normal
distributions, after linear transformations if necessary to achieve the correct ranges. However, the
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Journal compilation r 2007 International Federation of Operational Research Societies

D. F. Percy and B. M. Alkali / Intl. Trans. in Op. Res. 14 (2007) 547563

561

3000

Expected cost over horizon

2500

2000

1500

1000

500
0

200

400

600

800

1000

1200

1400

PM interval in days

Fig. 4. Pump A cost curve for generalized proportional intensities model with deterministic corrective maintenance and
explanatory variables.

hyper-parameters of these distributions can be dicult to specify. He also suggested that for
regression models such as this, a standardized multivariate normal distribution might be appropriate
after suitable linear transformations of the explanatory variables and parameters. We now illustrate
this approach for a GPIM with a power-law baseline intensity function, constant PM and CM scaling
factors and explanatory variables xt. The intensity function for this GPIM may be written as
it atb rM t sN t expx0 t c expz0 t d;

45

where
1
0
1
log a
1
B b C
B log t C
C
B
C
B
C
B
C
zt B
B M t C and d B log r C
@ log s A
@ N t A
c
xt
0

46

and we assume
d  MN m; V

47

with simple forms for the hyper-parameters, such as m 5 0 (zero vector) and V 5 I (identity matrix)
after suitable transformations. Extensions of this nature are also possible for stochastic, deterministic
and combined scaling factors. Note that if the scaling factors are all observed, constant or
deterministic, Equation (46) implies that the GPIM can be regarded as an application of the PIM.
However, this is not so in the more realistic scenario where they are stochastic or combined.
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D. F. Percy and B. M. Alkali / Intl. Trans. in Op. Res. 14 (2007) 547563

8. Conclusions
We investigate GPIMs, which were introduced by Percy and Alkali (2005) for the reliability and
maintenance analysis of complex repairable systems. In particular, we consider the forms of baseline
intensity function, PM and CM scaling factors and explanatory variables. Methods of tting and
comparing the models are discussed and then applied to ve sets of oil renery main pump data,
which are presented here for the rst time. Models with log-linear baseline intensities and decreasing
CM scaling factors t the data well, although there is scope for investigating the lack of information
available in typical data sets to support the use of stochastic and combined scaling. Including
explanatory variables also improves the t of these GPIM models, although apparently not
signicantly. Again, there is further scope for developing this inclusion of concomitant information.
This paper also presents algorithms based on GPIMs, to enable simulation of repairable
systems into the future. The simulation then facilitates the determination of reliability and
maintenance costs over selected horizons, as a basis for determining cost-eective strategies for
scheduling PM. We demonstrate this approach for one of the main oil pumps to show that this
analysis is robust to variations in the choice of GPIM used and can lead to considerable cost
savings. We conclude with a brief discussion of how Bayesian methods can be incorporated to
improve the accuracy of the analysis, particularly for the common situations where few data are
available. Further theoretical investigations of these models and analyses are required, as are
further practical applications to other systems.
This paper does not attempt to nd evidence of any practical economic and nancial benets
and is more concerned with developing the modelling approach and demonstrating its use in
practice, so that future investigations can try out these ideas on other data sets to assess any
diculties and benets. The main contributions of this work are the concepts and practicalities
related to mathematical modelling of the PM scheduling problem and these initial results
demonstrate that our approach appears to be no worse than current approaches and, with suitable
development in future, might oer considerable advantages.
Acknowledgements
The authors are grateful to Prof. K. A. H. Kobbacy for granting permission to publish the
reliability and maintenance history data corresponding to the renery oil pumps.
References
Ascher, H.E., Feingold, H., 1984. Repairable Systems Reliability: Modeling, Inference, Misconceptions and their Causes.
Marcel Dekker, New York.
Ascher, H.E., Kobbacy, K.A.H., Percy, D.F., 1999. Scheduling preventive maintenance using concomitant
information. University of Salford Technical Report.
Ascher, H.E., Kobbacy, K.A.H., Percy, D.F., 2000. Applying PIM and PHM models to PM scheduling. University of
Salford Technical Report.
Blischke, W.R., Murthy, D.N.P., 2000. Reliability: Modeling, Prediction, and Optimization. Wiley, New York.
Cox, D.R., 1972. The statistical analysis of dependencies in point processes. In: Lewis, P.A.W. (Ed.), Stochastic Point
Processes. Wiley, New York, pp. 5566.
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Crowder, M.J., Kimber, A.C., Smith, R.L., Sweeting, T.J., 1991. Statistical Analysis of Reliability Data. Chapman and
Hall, London.
Kobbacy, K.A.H., Fawzi, B.B., Percy, D.F., Ascher, H.E., 1997. A full history proportional hazards model for PM
scheduling. Quality and Reliability Engineering International 13, 187198.
Lugtigheid, D., Banjevic, D., Jardine, A.K.S., 2004. Modeling repairable systems reliability with explanatory variables
and repair and maintenance actions. IMA Journal of Management Mathematics 15, 89110.
Percy, D.F., 2004. Subjective priors for maintenance models. Journal of Quality in Maintenance Engineering 10, 221227.
Percy, D.F., Alkali, B.M., 2005. Generalized proportional intensities models for repairable systems. Management
Mathematics 17, 171185.
Prentice, R.L., Williams, B.J., Peterson, A.V., 1981. On the regression analysis of multivariate failure time data.
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Scarf, P.A., 1997. On the application of mathematical models in maintenance. European Journal of Operational
Research 99, 493506.

Appendix
Table A1
Oil pump inter-event times in days with censoring indicators denoted by asterisks
Pump A
34
14
81
86
156
20
96
47
45
97
88
30
4
1
4
13
27
8
148
92
13
13
67
29
12
1
37
28
38
20

Pump B
28
44
3
56
64
8
62
8
46
22
51
51
15
18
1
26
37
36
2
12
27
102
3
21
6
26
15
35
44
61

84
12
65
43
4

92
13
100
15
3
7
93
67
29
13
1
36
12
35
194
50
219
50
137
33
15
15
85
71
7
16
33
64
65
7

Pump C
11
49
28
82
8
12
43
28
82
14
14
66
11
63
22
43
19
28
134
45
7

3
24
52
4
26
0
79
32
66
31
33
21
99
27
47
33
56
19
16
8
2
5
48
6
2
2
9
1
12
37

44
6
28
23
129
43
45
50
18
8
7
1
2
6
30
1
48
25
1
19
24
19
16
10
3
7
39
83
18
61

28
26
3
6
17
15
8
2
24
57
114
54
56
10
18
6
10
21
28
36
15
31
56
5
17
76
17
49
31
22

Pump D

Pump E

4
2
62
8
77
94
148
50
75
42
82
92
70
210
36
137
37
28
130
17
3
17
20
6
19
16
31
37
65
8

95
16
9
30
16
33
65
33
54
7
63
34
2
30
15
10
7
16
10
20
1
7
34
26
13
9
5
3
1
29

r 2007 The Authors.

Journal compilation r 2007 International Federation of Operational Research Societies