The goal of this paper is to describe an advanced method of a crack detection, a new way to localize the crack position and to estimate the intensity of the depth with reference to a rotating shaft. As a first step, the shaft is physically modelled with a finite element method as usual and the dynamic mathematical model is derived from it using the Hamilton-principle and in this way the system is modelled by various subsystems. The equations of motion with crack is established by adaption of the local stiffness change through breathing and gaping from the crack to the equation of motion with undamaged shaft. This is supposed to be regarded as reference for the given system.

Based on the fictitious model of the time behaviour induced from vibration phenomena measured at the bearings, a nonlinear State Observer is designed in order to detect the crack on the shaft. This is elementary NL-observer (EOB). Using the elementary observer, an Estimator (Observer) Bank is established and arranged at the certain position on the shaft. In case a crack is found and its position is known, the procedure for the estimation of the depth is going to begin.

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