“…In comparison with Klutke and Yang (2002), Li and Luo (2005), Kharoufeh, Finkelstein, and Mixon (2006), Kharoufeh and Mixon (2009) and Xiang et al (2012), in our model both the wear and the shocks are affected by covariates. In our model, the shock magnitude is modeled by the generalized Pareto distribution, which can model the extreme shocks by adjusting the shock magnitude threshold parameter; see Hsing, Hüsler, and Leadbetter (1988) and van Noortwijk et al (2007).…”