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Stochastic model of reliability for use in the evaluation of the economic impact of a failure using life cycle cost analysis. Case studies on the rail freight and oil industries

This paper aims to investigate the technical and economic factors related to failure costs (non-reliability costs) within the life cycle cost analysis (LCCA) of a production asset. Life cycle costing is a well-established method for the evaluation of alternative asset options. It is a structured approach that addresses all the elements of this cost and can be used to produce a spend profile for an asset over its anticipated life-span. The results of an LCCA are used to assist management in the decision-making process when there is a choice of options. The main costs can be classified as the capital expenditure incurred when the asset is purchased, and the operating expenditure incurred during the asset’s life. This paper explores different aspects related to the failure costs within the LCCA, and describes the most important aspects of the stochastic model: a non-homogeneous Poisson process. This model is used to estimate the frequency of failures and their impact which can cause various failures in the total costs of a production asset. This paper also contains a case study for the rail freight industry (Chile) and the oil industry (Petronox, Venezuela) where the proposed model and concepts are applied, and respectively compared in terms of results. Finally, the presented model provides maintenance managers with a decision tool that optimizes the LCCA of an asset and increases the efficiency of the decision-making process related to the control of failures.

Dynamic Analytic Hierarchy Process: AHP Method Adapted to a Changing Environment

Abstract This paper describes the Analytic Hierarchy Process as a tool that can facilitate decisionmaking related to some of the critical aspects in maintenance or after-sales area, permitting the alignment of actions with the business objectives. Actual situations evidence how adopted decisions can change the boundary conditions of the system where the AHP is being applied. Therefore, this research is intended to provide a dynamic view of the AHP method, considering the alternatives as temporary variables and obtaining finally not only one good choice for a specific moment but a range of decisions which present different trends with the time. With this purpose this paper starts with a short literature review and the general characteristics of the AHP method. Afterwards, the paper presents the problematic that appears frequently in actual situations which justify the development of this research. Once described the uncertainty appeared after the AHP implementation, the proposed methodology called DAHP (Dynamic Analytic Hierarchy Process) is presented. Finally, this paper concludes with the main points of the research suggesting applications and further extensions.