An analytical model for the optimisation of maintenance profitability

S.A. Oke

International Journal of Productivity and Performance Management, 2005, vol. 54, issue 2, 113-136

Abstract: Purpose - The paper presents a mathematical model that measures the profitability of the maintenance system based on the traditional accounting definition of profitability. There is currently a dire need for an article presenting a scientific‐based framework for practitioners in maintenance to make optimal instead of sub‐optimal decisions on profitability.Design/methodology/approach– A case study is presented to reflect the actual application of the proposed model. Different situations were considered in modelling to obtain optimal results. Simulation experiments were conducted to demonstrate that maintenance profitability is a reality through the use of differential calculus.Findings– It was observed that the approach presented is a holistic viewpoint of maintenance profitability measurement.Research limitations/implications– An adequate understanding of the maintenance system is needed to properly implement the model.Practical implications– The practical application of the model is that the maintenance system will now be viewed as a value‐adding activity instead of “a necessary evil” or “a bottomless pit for expenses”.Originality/value– This paper fulfils an identified need and offers practical help to managers in taking guided decisions that are optimal.

Keywords: Profit; Modelling; Inflation; Maintenance (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijppmp:17410400510576612

DOI: 10.1108/17410400510576612

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