IDEAS home Printed from https://ideas.repec.org/a/sae/risrel/v238y2024i2p247-259.html
   My bibliography  Save this article

Condition-based maintenance optimization for deteriorating systems considering performance-based contracting and destructive inspections

Author

Listed:
  • Yujie Zhang
  • Yukun Wang
  • Xiaopeng Li
  • Yiliu Liu
  • Weizheng Gao

Abstract

As a novel contracting approach, the performance-based contracting (PBC) utilizes defined performance goals and structured incentives to improve the system availability and reduce the cost by tying the compensation to the service supplier to the system performance outcome. In this paper, two new CBM optimization models within the PBC framework are proposed considering the impacts of destructive inspections on the system degradation behavior. The average maintenance cost rate and the system availability within the contract horizon are estimated. Under the inspection-based replacement scheme, the objectives are to maximize the expected profit rate to the supplier and/or the resulting system average availability. A solution procedure based on the non-dominated sorting genetic algorithm (NSGA-II) combining with the weighted sum method (WSM) is introduced to derive the optimal CBM policies. Numerical examples and sensitivity analysis are conducted to examine the applicability of the proposed models.

Suggested Citation

  • Yujie Zhang & Yukun Wang & Xiaopeng Li & Yiliu Liu & Weizheng Gao, 2024. "Condition-based maintenance optimization for deteriorating systems considering performance-based contracting and destructive inspections," Journal of Risk and Reliability, , vol. 238(2), pages 247-259, April.
    • Handle: RePEc:sae:risrel:v:238:y:2024:i:2:p:247-259
    DOI: 10.1177/1748006X221148239
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/1748006X221148239
    Download Restriction: no
    File URL: https://libkey.io/10.1177/1748006X221148239?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Jin, Tongdan & Tian, Zhigang & Xie, Min, 2015. "A game-theoretical approach for optimizing maintenance, spares and service capacity in performance contracting," International Journal of Production Economics, Elsevier, vol. 161(C), pages 31-43.
    2. Sang-Hyun Kim & Morris A. Cohen & Serguei Netessine, 2007. "Performance Contracting in After-Sales Service Supply Chains," Management Science, INFORMS, vol. 53(12), pages 1843-1858, December.
    3. Caballé, N.C. & Castro, I.T. & Pérez, C.J. & Lanza-Gutiérrez, J.M., 2015. "A condition-based maintenance of a dependent degradation-threshold-shock model in a system with multiple degradation processes," Reliability Engineering and System Safety, Elsevier, vol. 134(C), pages 98-109.
    4. Bautista, Lucía & Castro, Inma T. & Landesa, Luis, 2022. "Condition-based maintenance for a system subject to multiple degradation processes with stochastic arrival intensity," European Journal of Operational Research, Elsevier, vol. 302(2), pages 560-574.
    5. Olde Keizer, Minou C.A. & Teunter, Ruud H. & Veldman, Jasper & Babai, M. Zied, 2018. "Condition-based maintenance for systems with economic dependence and load sharing," International Journal of Production Economics, Elsevier, vol. 195(C), pages 319-327.
    6. Delgarm, N. & Sajadi, B. & Kowsary, F. & Delgarm, S., 2016. "Multi-objective optimization of the building energy performance: A simulation-based approach by means of particle swarm optimization (PSO)," Applied Energy, Elsevier, vol. 170(C), pages 293-303.
    7. Yang, Li & Ye, Zhi-sheng & Lee, Chi-Guhn & Yang, Su-fen & Peng, Rui, 2019. "A two-phase preventive maintenance policy considering imperfect repair and postponed replacement," European Journal of Operational Research, Elsevier, vol. 274(3), pages 966-977.
    8. Mirzahosseinian, H. & Piplani, R., 2011. "A study of repairable parts inventory system operating under performance-based contract," European Journal of Operational Research, Elsevier, vol. 214(2), pages 256-261, October.
    9. Zhang, Yunzheng & Zhang, Xiaohong & Zeng, Jianchao & Wang, Jinhe & Xue, Songdong, 2019. "Lessees’ satisfaction and optimal condition-based maintenance policy for leased system," Reliability Engineering and System Safety, Elsevier, vol. 191(C).
    10. Hao Peng & Qianmei Feng & David Coit, 2010. "Reliability and maintenance modeling for systems subject to multiple dependent competing failure processes," IISE Transactions, Taylor & Francis Journals, vol. 43(1), pages 12-22.
    11. Xiujie Zhao & Olivier Gaudoin & Laurent Doyen & Min Xie, 2019. "Optimal inspection and replacement policy based on experimental degradation data with covariates," IISE Transactions, Taylor & Francis Journals, vol. 51(3), pages 322-336, March.
    12. Zhicheng Zhu & Yisha Xiang, 2021. "Condition-based maintenance for multi-component systems: Modeling, structural properties, and algorithms," IISE Transactions, Taylor & Francis Journals, vol. 53(1), pages 88-100, January.
    13. Wang, Jingjing & Zhao, Xian & Guo, Xiaoxin, 2019. "Optimizing wind turbine's maintenance policies under performance-based contract," Renewable Energy, Elsevier, vol. 135(C), pages 626-634.
    14. Kostas Selviaridis & Finn Wynstra, 2015. "Performance-based contracting: a literature review and future research directions," International Journal of Production Research, Taylor & Francis Journals, vol. 53(12), pages 3505-3540, June.
    15. Patriarca, Riccardo & Costantino, Francesco & Di Gravio, Giulio & Tronci, Massimo, 2016. "Inventory optimization for a customer airline in a Performance Based Contract," Journal of Air Transport Management, Elsevier, vol. 57(C), pages 206-216.
    16. Rodrigo Pascual & Matías Siña & Gabriel Santelices & Milton Román & Enrique López Droguett, 2017. "Optimal channel coordination in use-based product-service system contracts," International Journal of Production Research, Taylor & Francis Journals, vol. 55(23), pages 6946-6956, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Qin, Xuwei & Shao, Lusheng & Jiang, Zhong-Zhong, 2020. "Contract design for equipment after-sales service with business interruption insurance," European Journal of Operational Research, Elsevier, vol. 284(1), pages 176-187.
    2. Jackson, Canek & Pascual, Rodrigo & Mac Cawley, Alejandro & Godoy, Sergio, 2023. "Product–service system negotiation in aircraft lease contracts with option of disagreement," Journal of Air Transport Management, Elsevier, vol. 107(C).
    3. Rahimi-Ghahroodi, S. & Al Hanbali, A. & Zijm, W.H.M. & Timmer, J.B., 2019. "Emergency supply contracts for a service provider with limited local resources," Reliability Engineering and System Safety, Elsevier, vol. 189(C), pages 445-460.
    4. Wang, Xiaolin & Liu, Bin & Zhao, Xiujie, 2021. "A performance-based warranty for products subject to competing hard and soft failures," International Journal of Production Economics, Elsevier, vol. 233(C).
    5. Ge, Qianru & Peng, Hao & van Houtum, Geert-Jan & Adan, Ivo, 2018. "Reliability optimization for series systems under uncertain component failure rates in the design phase," International Journal of Production Economics, Elsevier, vol. 196(C), pages 163-175.
    6. Korkeamäki, Lauri & Kohtamäki, Marko & Parida, Vinit, 2021. "Worth the risk? The profit impact of outcome-based service offerings for manufacturing firms," Journal of Business Research, Elsevier, vol. 131(C), pages 92-102.
    7. Pliego Marugán, Alberto & García Márquez, Fausto Pedro & Pinar Pérez, Jesús María, 2022. "A techno-economic model for avoiding conflicts of interest between owners of offshore wind farms and maintenance suppliers," Renewable and Sustainable Energy Reviews, Elsevier, vol. 168(C).
    8. Jackson, Canek & Pascual, Rodrigo, 2021. "Joint pricing and maintenance strategies in availability-based product-service systems under different overhaul conditions," Reliability Engineering and System Safety, Elsevier, vol. 216(C).
    9. Wang, Yukun & Li, Xiaopeng & Chen, Junyan & Liu, Yiliu, 2022. "A condition-based maintenance policy for multi-component systems subject to stochastic and economic dependencies," Reliability Engineering and System Safety, Elsevier, vol. 219(C).
    10. Hu, Jiawen & Shen, Jingyuan & Shen, Lijuan, 2020. "Opportunistic maintenance for two-component series systems subject to dependent degradation and shock," Reliability Engineering and System Safety, Elsevier, vol. 201(C).
    11. Wu, Shaomin & Wu, Di & Peng, Rui, 2023. "Considering greenhouse gas emissions in maintenance optimisation," European Journal of Operational Research, Elsevier, vol. 307(3), pages 1135-1145.
    12. Zhang, Fengxia & Shen, Jingyuan & Liao, Haitao & Ma, Yizhong, 2021. "Optimal preventive maintenance policy for a system subject to two-phase imperfect inspections," Reliability Engineering and System Safety, Elsevier, vol. 205(C).
    13. Liu, Gehui & Chen, Shaokuan & Ho, Tinkin & Ran, Xinchen & Mao, Baohua & Lan, Zhen, 2022. "Optimum opportunistic maintenance schedule over variable horizons considering multi-stage degradation and dynamic strategy," Reliability Engineering and System Safety, Elsevier, vol. 225(C).
    14. Qin, Xuwei & Jiang, Zhong-Zhong & Sun, Minghe & Tang, Liang & Liu, Xiaoran, 2021. "Repairable spare parts provisioning for multiregional expanding fleets of equipment under performance-based contracting," Omega, Elsevier, vol. 102(C).
    15. Visnjic, Ivanka & Jovanovic, Marin & Neely, Andy & Engwall, Mats, 2017. "What brings the value to outcome-based contract providers? Value drivers in outcome business models," International Journal of Production Economics, Elsevier, vol. 192(C), pages 169-181.
    16. Dai, Anshu & Wang, Xin & Li, Yu & Li, Ting & He, Shuguang, 2023. "Design of a performance-based warranty policy with replacement–repair strategy and cumulative cost threshold," International Journal of Production Economics, Elsevier, vol. 255(C).
    17. Wang, Yulan & Wallace, Stein W. & Shen, Bin & Choi, Tsan-Ming, 2015. "Service supply chain management: A review of operational models," European Journal of Operational Research, Elsevier, vol. 247(3), pages 685-698.
    18. Koppe, Timo & Islam, Nihal, 2021. "Digital Service Innovation in Plant and Mechanical Engineering: Exploring Contextual Factors in the Innovation Process," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 126914, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    19. Wang, Naichao & Hu, Jiawen & Ma, Lin & Xiao, Boping & Liao, Haitao, 2020. "Availability Analysis and Preventive Maintenance Planning for Systems with General Time Distributions," Reliability Engineering and System Safety, Elsevier, vol. 201(C).
    20. Pinciroli, Luca & Baraldi, Piero & Zio, Enrico, 2023. "Maintenance optimization in industry 4.0," Reliability Engineering and System Safety, Elsevier, vol. 234(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:risrel:v:238:y:2024:i:2:p:247-259. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.