Abstract: In this paper, we investigate the residual life prediction
problem for a partially observable system subject to two failure
modes, namely a catastrophic failure and a failure due to the system
degradation. The system is subject to condition monitoring and the
degradation process is described by a hidden Markov model with
unknown parameters. The parameter estimation procedure based on
an EM algorithm is developed and the formulas for the conditional
reliability function and the mean residual life are derived, illustrated
by a numerical example.