A Renewal Theoretic Approach to the Estimation of Future Demand for Replacement Parts

This expository paper presents a renewal theoretic approach to the determination of the probability distribution of the demand for replacement parts in a specified future time interval. Ordinary, modified, and equilibrium renewal processes are discussed as models for physical processes in which parts are replaced as they fail. Some results from renewal theory are stated and then used to estimate the demand for replacement parts under a number of different conditions. Practical difficulties, and ways to circumvent them, are then discussed. The paper concludes with an illustrative example.