diff --git a/tests/unit/test_update_equipment_simulation.py b/tests/unit/test_update_equipment_simulation.py
new file mode 100644
index 0000000..253e0fd
--- /dev/null
+++ b/tests/unit/test_update_equipment_simulation.py
@@ -0,0 +1,171 @@
+import pytest
+from unittest.mock import AsyncMock, MagicMock, patch
+from src.aeros_equipment.service import update_equipment_for_simulation
+from src.aeros_equipment.model import AerosEquipment, AerosEquipmentGroup, ReliabilityPredictNonRepairable
+from src.aeros_simulation.model import AerosNode
+import logging
+
+@pytest.mark.asyncio
+async def test_update_equipment_for_simulation_basic(mocker):
+    # Mock parameters
+    db_session = AsyncMock()
+    aeros_db_session = AsyncMock()
+    project_name = "TestProject"
+    simulation_duration = 8760
+    overhaul_duration = 72
+    overhaul_interval = 8000
+    offset = 0
+    schematic_name = "TestSchematic"
+    
+    # Mock get_aeros_schematic_by_name
+    mock_schematic = MagicMock()
+    mock_schematic.id = 1
+    mocker.patch("src.aeros_equipment.service.get_aeros_schematic_by_name", return_value=mock_schematic)
+    
+    # Mock db_session.execute for equipments
+    mock_eq = MagicMock()
+    mock_eq.location_tag = "EQ001"
+    
+    mock_eq_result = MagicMock()
+    mock_eq_result.scalars.return_value.all.return_value = [mock_eq]
+    
+    # Mock db_session.execute for rbd_group
+    mock_group = MagicMock()
+    mock_group.group_name = "GROUP001"
+    
+    mock_group_result = MagicMock()
+    mock_group_result.scalars.return_value.all.return_value = [mock_group]
+    
+    # Mock db_session.execute for non_repairable
+    mock_nr_result = MagicMock()
+    mock_nr_result.scalars.return_value.all.return_value = []
+
+    db_session.execute.side_effect = [
+        mock_eq_result,    # for equipments
+        mock_group_result, # for rbd_group
+        mock_nr_result     # for non_repairable
+    ]
+    
+    # Mock get_aeros_equipment_by_location_tag
+    mock_nodes_data = [
+        {"equipmentName": "EQ001", "relDisType": "Fixed", "relDisP1": 0},
+        {"equipmentName": "GROUP001", "relDisType": "Fixed", "relDisP1": 0}
+    ]
+    mocker.patch("src.aeros_equipment.service.get_aeros_equipment_by_location_tag", return_value=mock_nodes_data)
+    
+    # Mock get_asset_batch
+    mock_reliability_data = {
+        "EQ001": {
+            "relDisType": "Weibull2",
+            "relDisP1": 1.5,
+            "relDisP2": 10000,
+            "cmDisType": "Fixed",
+            "cmDisP1": 5,
+            "cmDisP2": 0
+        }
+    }
+    mocker.patch("src.aeros_equipment.service.get_asset_batch", return_value=mock_reliability_data)
+    
+    # Mock update_oh_interval_offset
+    mocker.patch("src.aeros_equipment.service.update_oh_interval_offset", return_value=None)
+    
+    # Mock update_node
+    mock_update_node = mocker.patch("src.aeros_equipment.service.update_node", return_value=None)
+    
+    # Run the function
+    results = await update_equipment_for_simulation(
+        db_session=db_session,
+        aeros_db_session=aeros_db_session,
+        project_name=project_name,
+        simulation_duration=simulation_duration,
+        overhaul_duration=overhaul_duration,
+        overhaul_interval=overhaul_interval,
+        offset=offset,
+        schematic_name=schematic_name
+    )
+    
+    # Assertions
+    assert "EQ001" in results
+    assert results["EQ001"]["distribution"] == "Weibull2"
+    assert results["EQ001"]["oh_duration"] == overhaul_duration
+    
+    # Check if update_node was called with correct arguments
+    called_args = mock_update_node.call_args[1]
+    equipment_nodes = called_args["equipment_nodes"]
+    
+    # Find EQ001 in equipment_nodes
+    eq001_node = next(node for node in equipment_nodes if node["equipmentName"] == "EQ001")
+    assert eq001_node["relDisType"] == "Weibull2"
+    assert eq001_node["ohDisP1"] == overhaul_duration
+    assert eq001_node["relDisUnitCode"] == "UHour"
+    assert eq001_node["ohDisUnitCode"] == "UHour"
+
+@pytest.mark.asyncio
+async def test_update_equipment_for_simulation_custom_input(mocker):
+    # Mock parameters
+    db_session = AsyncMock()
+    aeros_db_session = AsyncMock()
+    project_name = "TestProject"
+    simulation_duration = 8760
+    overhaul_duration = 72
+    overhaul_interval = 8000
+    offset = 0
+    schematic_name = "TestSchematic"
+    
+    custom_input = {
+        "EQ001": {
+            "mttr": 10,
+            "failure_rate": 0.5,
+            "distribution": "Exponential2"
+        }
+    }
+    
+    # Mock get_aeros_schematic_by_name
+    mock_schematic = MagicMock()
+    mock_schematic.id = 1
+    mocker.patch("src.aeros_equipment.service.get_aeros_schematic_by_name", return_value=mock_schematic)
+    
+    # Mock db_session.execute
+    mock_eq = MagicMock()
+    mock_eq.location_tag = "EQ001"
+    
+    mock_eq_result = MagicMock()
+    mock_eq_result.scalars.return_value.all.return_value = [mock_eq]
+    
+    mock_empty_result = MagicMock()
+    mock_empty_result.scalars.return_value.all.return_value = []
+
+    db_session.execute.side_effect = [
+        mock_eq_result,    # equipments
+        mock_empty_result, # rbd_group
+        mock_empty_result  # non_repairable
+    ]
+    
+    # Mock get_aeros_equipment_by_location_tag
+    mock_nodes_data = [
+        {"equipmentName": "EQ001", "relDisType": "Fixed", "relDisP1": 0}
+    ]
+    mocker.patch("src.aeros_equipment.service.get_aeros_equipment_by_location_tag", return_value=mock_nodes_data)
+    
+    # Mock get_asset_batch (should be called but maybe ignored if custom input matches)
+    mocker.patch("src.aeros_equipment.service.get_asset_batch", return_value={})
+    
+    mocker.patch("src.aeros_equipment.service.update_oh_interval_offset", return_value=None)
+    mock_update_node = mocker.patch("src.aeros_equipment.service.update_node", return_value=None)
+    
+    # Run
+    results = await update_equipment_for_simulation(
+        db_session=db_session,
+        aeros_db_session=aeros_db_session,
+        project_name=project_name,
+        simulation_duration=simulation_duration,
+        overhaul_duration=overhaul_duration,
+        overhaul_interval=overhaul_interval,
+        offset=offset,
+        schematic_name=schematic_name,
+        custom_input=custom_input
+    )
+    
+    assert "EQ001" in results
+    assert results["EQ001"]["mttr"] == 10
+    assert results["EQ001"]["distribution"] == "Exponential2"