0, such that the model constructed involves minimal repair and discounting rate (∝ >0). The unit considered in this paper is subjected to three categories of failures, which are Category I, Category II and Category III failures. Category I failure is an un-repairable one, which occurs suddenly. While Category II and Category III failures are both repairable, which occurs due to time and usage, and the two failures are minimally repaired. A numerical example is provided, so as to investigate the characteristics of the model presented and determine the optimal discrete replacement time (N^*) of the unit.]]>