Abstract
This paper deals with a system consisting of two units under Markovian deterioration. The transition probability of each unit is not independent each other, and the cost of replacing both units concurrently is less than the cost of replacing them at different times. Then we investigate a replacemant policy for units in a two-unit system possessing stochastic and economic dependence. The structural properties of optimal replacement policy that minimizes the expected total discounted cost are characterized. Also illustrative examples are presented.
