- In this paper, we study a modified minimal repair/replacement problem that is formulated as a Markov decision process. The operating cost is assumed to be a nondecreasing function of the system's age. The specific maintenance actions for a manufacturing system to be considered are whether to have replacement, minimal repair or keep it operating. It is shown that a control limit policy, or in particular a (t, T) policy, is optimal over the space of all possible policies under the discounted cost criterion. A computational algorithm for the optimal (t, T) policy is suggested based on the total expected discounted cost. 1997 Elsevier Science B.V.