Abstract: The Markov decision process (MDP) based
methodology is implemented in order to establish the optimal
schedule which minimizes the cost. Formulation of MDP problem
is presented using the information about the current state of pipe,
improvement cost, failure cost and pipe deterioration model. The
objective function and detailed algorithm of dynamic programming
(DP) are modified due to the difficulty of implementing the
conventional DP approaches. The optimal schedule derived from
suggested model is compared to several policies via Monte
Carlo simulation. Validity of the solution and improvement in
computational time are proved.