The approach required for CRO includes a probabilistic life model and uncertainty distributions in the model input parameters. The uncertainty distributions are subject to an analysis to yield the failure probability as a function of forward time.
The present value of money today is different from its future value. Therefore, the preferred financial measure for CRO is net present value (NPV). The optimum equipment action date (for maintenance, inspection, etc) corresponds to the maximum value of NPV.
Optimisation is the decision analysis process that maximises the total NPV for the alternative actions. The action schedule is optimised when total NPV is maximised, provided budget limits are not exceeded.
For safety-critical systems, constraints on target probability levels are also incorporated into the LIFEWISE decision optimisation algorithm.
LIFEWISE is not an individual software tool. LIFEWISE collectively describes the set of customised software tools available from TWI.
The software tools can include, for example: MS Excel, Solver, @RISK, MiniTab, STRUREL, etc which are available from TWI or third-parties with on-the-job training in the use of these tools.
The LIFEWISE techniques are based on published methods such as:
- J Speck, A Muhammed, et al: "Methods for the financial optimisation of plant management", TWI Industrial Members Report No.783, November 2003
- CRTD-Vol. 41: "Risk-based methods for equipment life management", ASME Centre for Research and Technology Development, 2003
Benefits of on-the-job technology transfer
- In-house training for LIFEWISE cuts out the need for specialist consultants for system maintenance.
- Technology transfer is accelerated using realistic plant information rather than idealised training examples.
- Interaction with experienced TWI engineers to provide immediate advice on difficult implementation problems.
Minimum software requirements
The latest version of MS Excel and Palisade's @RISK Decision Suite.