Hennie Husniah

Maintenance Service Contracts for Equipment Sold with Two Dimensional Warranties

Abstract HeThis paper deals with maintenance service contracts for equipment (such as dump trucks) sold with two dimensional warranties. We consider a situation where an agent offers several maintenance contract options and the owner of the equipment has to select the optimal option. As the availability of the equipment is a critical measure for attaining the owner’s business objectives, the maintenance contract options offered need to ensure a high availability of the equipment. We study three maintenance service options considering the availability target from both the owner and OEM point of views and use a non-cooperative game formulation to determine the optimal price structure (i.e., the contract price and repair cost) for the OEM and the optimal contract option for the owner.

Performance-based maintenance contract for equipments used in mining industry

In this paper, we study performance based maintenance contracts for dump trucks operated in a mining industry. The service contract is characterised by two dimensional limits - one limit representing age and the other limit usage. In a performance based service contract uses an attractive incentives to motivate the the agent to increase the equipments performance beyond the target, and this in turn gives benefit for both the owner of the trucks and the Agent of service contract. In this paper, we study performance based maintenance service contracts for equipment used in a mining industry and the equipment is sold with two dimensional warranties and the perfomances considered includes availability and safety measures. We consider a situation where an agent offers several service contract options and the owner of equipment has to select the optimal option. We obtain the optimal strategy (pricing structure) for the agent and the optimal option for the owner using a stackelberg game formulation in which the agent is as a leader and the owner as a follower.

Two Dimensional Maintenance Contracts for a Fleet of Dump Trucks Used in Mining Industry

In this paper, we study two dimensional maintenance contracts for a fleet of dump trucks operated in a mining industry. The two-dimensional contract is charaterised by two parameters (i.e. age and usage limits) which define a region. Two different shapes of the contract region are studied, where one region favors the customer, and the other the service provider. The maintenance service contracts studied is the performance based contract which offers incentives to motivate a service provider (an agent) to increase the equipment’s performance beyond the target. This in turn gives benefit for both the owner of the trucks and the agent of service contract. The decision problem under study is that an agent offers several two dimensional service contract options and the owner of the trucks has to select the optimal option. We use a Nash game theory formulation in order to obtain a win-win solution – i.e. the optimal strategy (pricing structure) for the agent and the optimal option for the owner.

Performance-based maintenance contract for a fleet of dump trucks used in mining industry

In this paper, we study two dimensional maintenance contracts for a fleet of dump trucks operated in a mining industry. We consider performance based service contracts which offer attractive incentives to motivate a service provider (an agent) to increase the equipments performance beyond the target. This in turn gives benefit for both the owner of the trucks and the Agent of service contract. The situation under study is that an agent offers several two dimensional service contract options and the owner of the trucks needs to select the optimal option. We use a stackelberg game formulation in which the agent is as a leader and the owner as a follower to obtain the optimal strategy (pricing structure) for the agent and the optimal option for the owner.

A maintenance service contract for a warranted product

In this paper, we investigate a maintenance service contract for a warranted product carried out by the Original Equipment Manufacturer (OEM). The model was developed under the assumption that there are one consumer and one service provider who is the OEM. This is typically applied to the situation where the OEM is the only service provider such as in the mining industry. From the OEM point of view, two contract options were considered, they are: the OEM carried out all repairs and preventive maintenance activities; the OEM carries out failure and the customer undertakes in house preventive maintenance actions. The model uses a non-cooperative game formulation by maximizing expected profits. We use a linear function of failure intensity to consider a product with increasing failure intensity. We obtain the pricing structure in the contract. And for the customer, they can choose the optimal option under the term of contract.

Optimal preventive maintenance for a two dimensional lease contract

Abstract In this paper, we study a two dimensional lease equipment contract with involving imperfect preventive maintenance. The two dimensional lease contract is characterized by two parameters – age and usage limits. The lessor performs both preventive and corrective maintenance and a penalty cost incurred to the lessor when the time required to perform a corrective maintenance exceeds a pre-specified target. Failures are influenced by the age and usage of the equipment and modelled by using a one dimensional approach. We consider that an imperfect preventive maintenance (PM) policy reduces the equipment failure rate and hence it will decrease the penalty cost and maintenance cost during the lease contract. We find the optimal PM interval, number of PM, PM degree (reduction in failure rate) minimizing the expected total cost.

Renewal process in two-dimensional repairable products

One alternative to prolong a life time of a product is doing a preventive maintenance. The number of failures from the product can be reduced by optimal maintenance policy. This research investigates a periodic maintenance policy for a product sold with a two-dimensional warranty. Actually, this idea is a development of that in Murthy and Wilson (1991). The product failures is modeled using a one-dimensional approach in which usage is a function of age. Furthermore, it is assumed that the relation between these variables is linear. The slope of the line is the usage rate. The optimal periodic maintenance time can be derived by minimizing the expected cost per unit time. We also proved that the expected cost per unit time is a concave function, and gave the global optimal solution. As a numerical example, we choose Weibull distribution with different levels of usage rates. The numerical results show that the increase of usage rate will decrease the length of periodic maintenance time.

Hybrid minimal repair and age replacement policy for two-dimensional warranted products

In this paper, we investigate a hybrid minimal repair and age replacement policy for a repairable product sold with a two-dimensional non-renewing failure replacement warranty. We first model product failures using the one-dimensional approach and then use a more appropriate formulation to model the effect of age and usage to the product degradation. Under this policy, for a given usage rate y, the product is directly repaired minimally when it fails in (0, Sy] and replaced with the new one on the first failure in (Sy, ?y] or when its age reaches ?y, whichever occurs first. We obtain the global optimal solution of Sy, for a given ?y which minimises the expected cost per unit time to the buyer. We present numerical examples to illustrate the properties of the optimal solution.

Lease Contract in Usage Based Remanufactured Equipment Service System.

In this paper we study a usage based lease contract for remanufactured equipment as an implementation of product service system. Under this lease contract, the equipment is leased for a period of \( \Gamma \) with a maximum usage, U. If the usage of the equipment exceeds U at time \( \Gamma \), then lessee will be charged some additional cost. Otherwise there will be no additional cost. The price of the lease contract for the remanufactured equipment is much cheaper than that of a new one. As a result, the lease contract for the remanufactured equipment would be a more attractive option to the lessee. The decision problem for the lessee is to select the best option suitable to its requirement, and the decision problem for the lessor is find the optimal maintenance policy and the price for each length of periods offered. We provide numerical examples for illustrating the optimal decisions for the lessee, and the lessor, which maximizes the expected profit for each party.

Optimal number of fleet maintenance contract with policy limit cost

In this paper, we study a two-dimensional maintenance contract for a fleet of trucks such as dump truck operated in a mining industry. The trucks are sold with a two-dimensional warranty. The warranty and the maintenance contract are characterized by two parameters (i.e. age and usage limits) which define a 2-dimensional region. The maintenance service contracts studied is the one which offers policy limit cost to protect a service provider (an agent) from over claim and to pursue the owner to do maintenance under specified cost inhouse. This in turn gives benefit for both the owner of the trucks and the agent of service contract. The decision problem for an agent is to determine the optimal price for each options offered and for the owner is to select the best contract option. We use a Nash game theory formulation in order to obtain a win-win solution — i.e. the optimal price for the agent and the optimal option for the owner.