Under ordinary block replacement policy, items are replaced at constant intervals of time and at failure. A modified block replacement policy is proposed which utilizes used items with age not exceeding a specified limit as well as new items for replacement. Our policy divides the interval between two consecutive scheduled replacements into three regions; Region I is the new item region, Region II is the new item region creating reusable items and Region III is the used item region. A constraint that the length of the region creating used items is greater than or equal to that of the region requiring used items is imposed. This constraint not only facilitates to obtain the minimum cost solutions, but makes our policy self-sufficient in terms of the number of used items needed for infinite time operation. In general, numerical search method is required to obtain the minimum cost solutions per unit time for an infinite time span. When the failure time distribution is given by an Erlang distribution, the results of our policy are compared with that of other block replacement policies.