Optimal design of maintenance service contract considering preventive maintenance, random repair cost and time value of money
Offering Maintenance Service Contracts (MSCs) for production equipment can be a good source of revenue for theProviders of these services. To do this, designing an optimal MSC with a minimum price will be of great interest to service providers. In this paper, the effect of conducting periodic preven...
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| Format: | Article |
| Language: | English |
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Ayandegan Institute of Higher Education,
2024-09-01
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| Series: | International Journal of Research in Industrial Engineering |
| Subjects: | |
| Online Access: | https://www.riejournal.com/article_196466_9fbd8fe6d2bbd5ef1d0017a6b938c24d.pdf |
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| author | Majeed Heydari Amir Yousefli |
| author_facet | Majeed Heydari Amir Yousefli |
| author_sort | Majeed Heydari |
| collection | DOAJ |
| description | Offering Maintenance Service Contracts (MSCs) for production equipment can be a good source of revenue for theProviders of these services. To do this, designing an optimal MSC with a minimum price will be of great interest to service providers. In this paper, the effect of conducting periodic preventive maintenance on the failure process of a given equipment item and its corresponding cost are studied. Assuming minimal repair at failure with a random repair cost, the expected cost of maintenance service is estimated. Due to the time delay between selling the contract and paying the repair bills, the time value of service cost at the time of selling the contract is derived. Then, the cost-plus approach is used to determine the price of the MSC. In the presented model, the service provider determines the number of preventive maintenance and the improvement level to minimize the expected price of the MSC. A numerical example with comprehensive sensitivity analysis is presented to illustrate the model and its parameters' effect. The result shows that the presented model helps the service provider to design an MSC with a minimum price while assuring the profit margin. |
| format | Article |
| id | doaj-art-ba112d760c3b46eb9ff934fe7626c15b |
| institution | Kabale University |
| issn | 2783-1337 2717-2937 |
| language | English |
| publishDate | 2024-09-01 |
| publisher | Ayandegan Institute of Higher Education, |
| record_format | Article |
| series | International Journal of Research in Industrial Engineering |
| spelling | doaj-art-ba112d760c3b46eb9ff934fe7626c15b2025-01-30T15:10:37ZengAyandegan Institute of Higher Education,International Journal of Research in Industrial Engineering2783-13372717-29372024-09-0113334335410.22105/riej.2024.347140.1320196466Optimal design of maintenance service contract considering preventive maintenance, random repair cost and time value of moneyMajeed Heydari0Amir Yousefli1Department of Industrial Engineering, University of Zanjan, Zanjan, Iran.Department of Industrial Engineering, University of Zanjan, Zanjan, Iran.Offering Maintenance Service Contracts (MSCs) for production equipment can be a good source of revenue for theProviders of these services. To do this, designing an optimal MSC with a minimum price will be of great interest to service providers. In this paper, the effect of conducting periodic preventive maintenance on the failure process of a given equipment item and its corresponding cost are studied. Assuming minimal repair at failure with a random repair cost, the expected cost of maintenance service is estimated. Due to the time delay between selling the contract and paying the repair bills, the time value of service cost at the time of selling the contract is derived. Then, the cost-plus approach is used to determine the price of the MSC. In the presented model, the service provider determines the number of preventive maintenance and the improvement level to minimize the expected price of the MSC. A numerical example with comprehensive sensitivity analysis is presented to illustrate the model and its parameters' effect. The result shows that the presented model helps the service provider to design an MSC with a minimum price while assuring the profit margin.https://www.riejournal.com/article_196466_9fbd8fe6d2bbd5ef1d0017a6b938c24d.pdfmaintenance service contractpreventive maintenancepricingrandom repair costtime value of money |
| spellingShingle | Majeed Heydari Amir Yousefli Optimal design of maintenance service contract considering preventive maintenance, random repair cost and time value of money International Journal of Research in Industrial Engineering maintenance service contract preventive maintenance pricing random repair cost time value of money |
| title | Optimal design of maintenance service contract considering preventive maintenance, random repair cost and time value of money |
| title_full | Optimal design of maintenance service contract considering preventive maintenance, random repair cost and time value of money |
| title_fullStr | Optimal design of maintenance service contract considering preventive maintenance, random repair cost and time value of money |
| title_full_unstemmed | Optimal design of maintenance service contract considering preventive maintenance, random repair cost and time value of money |
| title_short | Optimal design of maintenance service contract considering preventive maintenance, random repair cost and time value of money |
| title_sort | optimal design of maintenance service contract considering preventive maintenance random repair cost and time value of money |
| topic | maintenance service contract preventive maintenance pricing random repair cost time value of money |
| url | https://www.riejournal.com/article_196466_9fbd8fe6d2bbd5ef1d0017a6b938c24d.pdf |
| work_keys_str_mv | AT majeedheydari optimaldesignofmaintenanceservicecontractconsideringpreventivemaintenancerandomrepaircostandtimevalueofmoney AT amiryousefli optimaldesignofmaintenanceservicecontractconsideringpreventivemaintenancerandomrepaircostandtimevalueofmoney |