Joint pricing and maintenance strategies in availability-based product-service systems under different overhaul conditions

Canek Jackson and Rodrigo Pascual

Reliability Engineering and System Safety, 2021, vol. 216, issue C

Abstract: An important increase in maintenance outsourcing is observed nowadays. This is critical for industries that want to focus on core business or cannot perform maintenance in-house. Such is a challenging situation since contracting out implies two parties attempting to maximize their benefits while reaching an agreement at the same time. In this context, a body of research is available regarding maintenance strategies’ decision-making. However, contributions related to pricing in maintenance contracts are very scarce. In this work, we propose an original methodology to determine the optimal overhaul and replacement policies for an equipment being maintained by an external agent, while jointly negotiating the service fee. Through the concept of maintenance degree, we study the effect of different overhaul conditions on decision-making for an availability-based contract where both equipment and maintenance are bundled in a single offer. Pricing is determined using a cooperative game approach where bargaining takes place. In particular, a sensitivity analysis is carried out to understand the effect on the number of contracts to serve, the availability service level, the pricing, and the maintenance strategies. A numerical example is presented to illustrate the results. The model was validated using discrete-event simulation over a test case.

Keywords: Maintenance degree; Replacement; Availability-based contract; Bargaining; Discrete-event simulation (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reensy:v:216:y:2021:i:c:s0951832021003392

DOI: 10.1016/j.ress.2021.107817

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