Rail is a significant capital asset for railway companies. It contributes more than half of the capital assets of railway infrastructure. Recent rail inspection data using Ultrasonic rail testing has shown increasing number of rail defects, failures and causing disruptions to rail services. This cost can be further increased when the track quality is poor. In recent years, railroads have been purchasing over 500,000 tons of rails per year at an estimated total cost of US $1.25 billion for replacement of worn out and degraded rails. Rail grinding is considered as viable means in reducing the impacts of rail defects and failures. Rail grinding can result in improved curving performance (wheel/rail interaction) nd prevents crack initiation and propagation of surface cracks due to RCF. This paper focuses on analysis of rail degradation process and development of mathematical model considering technical and economic decisions in rail grinding to rail infrastructure owners.