The formulation of a partially observed Markov decision process (POMDP) model to adaptively schedule testing, minimal repairs and overhauls for a two-state process with age-dependent degradation is presented. Structurally, the optimal maintenance policy is of control-limit type with respect to the repair and overhaul actions in both age and the probability of being out-of-control. A tailored solution algorithm is developed that iteratively determines an upper bound on the truncation age under the optimal policy. Numerical examples highlight the flexibility of the model, possible complexities of the optimal policy, and cost savings in comparison with less flexible models.
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