A STOCHASTIC MODEL FOR IDENTIFYING THE THRESHOLD SHOCK WHICH FOLLOWS THREE PARAMETER GENERALIZED PARETO DISTRIBUTION

Stochastic process model for approximating the underlying component fails when the total amount of damage exceeds a threshold level. Survival measures of this model are derived, using the theory of cumulative processes. However, most of the behaviour in this stochastic model for the expected time strongly depends on initial conditions. Numerical examples are given to illustrate various aspects of the model considered for the expected time to threshold.