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Abstract Optimal replacement policy for a system is one of the most important tools for resource mangement. This research is directed to develop a generalized age replacement policy for the systems whose failure rate function is increasing. The developed policy incorporates minimal repair, preventive replacement, corrective replacement and operating costs. A Mathematical model is constructed to depict this problem. The objective of the developed model is to detemine the best time limits for minimal repair (S*)and preventive replacement (t*p) respectively, which minimize the total expected maintenance costs . The following replacement strategy is considered : i) The failures occur in the time interval [0, S],0<S<tp, are corrected by minimal repair. Ii)If a failure occurs in the time interval [S,tp], the item is replaced by a new one,i.e., (perform a corrective replacement). (iii)If the item survive until time tp, a preventive replacement is performed. Simulation model is developed to handle this prpblem and to obtain the best time limits (S*, t*p). Copmparing results of the developed policy with a number of the pervious policies demonstrate its success and usefulness. Also it proves that the proposed policy is an improvement upon the others. |