IDEAS home Printed from https://ideas.repec.org/a/spr/waterr/v37y2023i14d10.1007_s11269-023-03626-6.html
   My bibliography  Save this article

A Contract Period Optimization Model for Water Saving Management Contract Project Based on Equipment Replacement

Author

Listed:
  • Wei Li

    (Hebei University of Engineering
    Hebei Key Laboratory of Intelligent Water Conservancy)

  • Xiaosheng Wang

    (Hebei University of Engineering)

  • Qian Zhang

    (Universiti Sains Malaysia)

Abstract

Water saving management contract (WSMC) is a new water-saving strategy based on market mechanism. As a period for the water saving service company (WSSC) to provide funds and technology to water user, contract period is one of the key elements in WSMC projects. This paper attempted to establish a model to determine the optimal contract period based on equipment replacement. First, the performance degradation simulation of water-saving equipment was constructed based on degradation path model. Second, water-saving process simulation under equipment replacement was established based on measured renewal cycle of water-saving equipment. Third, a contract period optimization model for WSMC projects was built with the objective of maximizing WSSC profit net present value (NPV) and with constraints of water user incentive constraint, WSSC rational constraint, and minimal cooperation duration. Finally, a WSMC project case in China was studied and the solutions were compared with traditional model. The results showed that the optimal contract period in this paper was 3 years longer than the one in traditional model. Meanwhile, the measured equipment renewal cycle was 7 years and it was less than the estimated economic lifetime. Based on the 9-year contract, the water user’s revenue was higher with 55.8% than original contract, while WSSC’s profit loss was lower with 60.8% than the traditional results. The findings reveal that the implementation of an equipment replacement plan considerably boost the revenue of participants and assist WSSC in obtaining more profit.

Suggested Citation

  • Wei Li & Xiaosheng Wang & Qian Zhang, 2023. "A Contract Period Optimization Model for Water Saving Management Contract Project Based on Equipment Replacement," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 37(14), pages 5725-5741, November.
    • Handle: RePEc:spr:waterr:v:37:y:2023:i:14:d:10.1007_s11269-023-03626-6
    DOI: 10.1007/s11269-023-03626-6
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11269-023-03626-6
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s11269-023-03626-6?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
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Gao, Hongda & Cui, Lirong & Dong, Qinglai, 2020. "Reliability modeling for a two-phase degradation system with a change point based on a Wiener process," Reliability Engineering and System Safety, Elsevier, vol. 193(C).
    2. Marco Ferrante & Dewi Rogers & Josses Mugabi & Francesco Casinini, 2023. "Addressing Water Meter Inaccuracies Caused By Intermittent Water Supply: A Laboratory Investigation of Remedial Measures," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 37(10), pages 3921-3933, August.
    3. Samara López-Ruiz & Nazaret Ibáñez-Rueda & Jorge Guardiola & Francisco González-Gómez, 2023. "Does the Ownership of Water Utilities Influence Water-Saving Advice Provided to Service Users? An Analysis of the Spanish Water Sector," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 37(8), pages 3299-3318, June.
    4. Kai Guo & Limao Zhang & Tao Wang, 2021. "Concession period optimisation in complex projects under uncertainty: a public–private partnership perspective," Construction Management and Economics, Taylor & Francis Journals, vol. 39(2), pages 156-172, February.
    5. Yang Wang & Qingying Li & Jian Zuo & Katharine Bartsch, 2022. "How Did Balance Loss Occur? A Cross-stakeholder Analysis of Risk Misallocation in a Sponge City PPP Project," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 36(13), pages 5225-5240, October.
    6. Trianni, Andrea & Cagno, Enrico & Farné, Stefano, 2016. "Barriers, drivers and decision-making process for industrial energy efficiency: A broad study among manufacturing small and medium-sized enterprises," Applied Energy, Elsevier, vol. 162(C), pages 1537-1551.
    7. Xinxin Liu & Xiaosheng Wang & Haiying Guo & Xiaojie An, 2021. "Benefit Allocation in Shared Water-Saving Management Contract Projects Based on Modified Expected Shapley Value," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 35(1), pages 39-62, January.
    8. Zhi‐Sheng Ye & Min Xie, 2015. "Rejoinder to ‘Stochastic modelling and analysis of degradation for highly reliable products’," Applied Stochastic Models in Business and Industry, John Wiley & Sons, vol. 31(1), pages 35-36, January.
    9. Nicoleta Ungureanu & Valentin Vlăduț & Gheorghe Voicu, 2020. "Water Scarcity and Wastewater Reuse in Crop Irrigation," Sustainability, MDPI, vol. 12(21), pages 1-18, October.
    10. Liu, Bin & Zhao, Xiujie & Liu, Guoquan & Liu, Yiqi, 2020. "Life cycle cost analysis considering multiple dependent degradation processes and environmental influence," Reliability Engineering and System Safety, Elsevier, vol. 197(C).
    11. Zhi‐Sheng Ye & Min Xie, 2015. "Stochastic modelling and analysis of degradation for highly reliable products," Applied Stochastic Models in Business and Industry, John Wiley & Sons, vol. 31(1), pages 16-32, January.
    12. Veloso, Guilherme A. & Loschi, Rosangela H., 2021. "Dynamic linear degradation model: Dealing with heterogeneity in degradation paths," Reliability Engineering and System Safety, Elsevier, vol. 210(C).
    13. Wang, Wenbin, 2012. "An overview of the recent advances in delay-time-based maintenance modelling," Reliability Engineering and System Safety, Elsevier, vol. 106(C), pages 165-178.
    14. Jin, Hongyu & Liu, Shijing & Sun, Jide & Liu, Chunlu, 2021. "Determining concession periods and minimum revenue guarantees in public-private-partnership agreements," European Journal of Operational Research, Elsevier, vol. 291(2), pages 512-524.
    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. Veloso, Guilherme A. & Loschi, Rosangela H., 2021. "Dynamic linear degradation model: Dealing with heterogeneity in degradation paths," Reliability Engineering and System Safety, Elsevier, vol. 210(C).
    2. Santos, Cristiano C. & Loschi, Rosangela H., 2020. "Semi-parametric Bayesian models for heterogeneous degradation data: An application to laser data," Reliability Engineering and System Safety, Elsevier, vol. 202(C).
    3. Zhuang, Liangliang & Xu, Ancha & Wang, Yijun & Tang, Yincai, 2024. "Remaining useful life prediction for two-phase degradation model based on reparameterized inverse Gaussian process," European Journal of Operational Research, Elsevier, vol. 319(3), pages 877-890.
    4. Zhou, Jian & Li, Zhanhang & Nassif, Hani & Coit, David W., 2025. "A two-stage Weibull-gamma degradation model with distinct failure mechanism initiation and propagation stages," Reliability Engineering and System Safety, Elsevier, vol. 256(C).
    5. Xu, Jun & Liang, Zhenglin & Li, Yan-Fu & Wang, Kaibo, 2021. "Generalized condition-based maintenance optimization for multi-component systems considering stochastic dependency and imperfect maintenance," Reliability Engineering and System Safety, Elsevier, vol. 211(C).
    6. Zhang, Wenyu & Zhang, Xiaohong & He, Shuguang & Zhao, Xing & He, Zhen, 2024. "Optimal condition-based maintenance policy for multi-component repairable systems with economic dependence in a finite-horizon," Reliability Engineering and System Safety, Elsevier, vol. 241(C).
    7. Sun, Xuxue & Cai, Wenjun & Li, Mingyang, 2021. "A hierarchical modeling approach for degradation data with mixed-type covariates and latent heterogeneity," Reliability Engineering and System Safety, Elsevier, vol. 216(C).
    8. Truong-Ba, Huy & Cholette, Michael E. & Rebello, Sinda & Kent, Geoff, 2024. "Joint planning of inspection, replacement, and component decommissioning for a series system with non-identically degrading components," Reliability Engineering and System Safety, Elsevier, vol. 241(C).
    9. Kong, Xuefeng & Yang, Jun & Hao, Songhua, 2021. "Reliability modeling-based tolerance design and process parameter analysis considering performance degradation," Reliability Engineering and System Safety, Elsevier, vol. 207(C).
    10. Liao, Guobo & Yin, Hongpeng & Chen, Min & Lin, Zheng, 2021. "Remaining useful life prediction for multi-phase deteriorating process based on Wiener process," Reliability Engineering and System Safety, Elsevier, vol. 207(C).
    11. Song, Kai & Shi, Jian & Yi, Xiaojian, 2020. "A time-discrete and zero-adjusted gamma process model with application to degradation analysis," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 560(C).
    12. Zhang, Ao & Wang, Zhihua & Bao, Rui & Liu, Chengrui & Wu, Qiong & Cao, Shihao, 2023. "A novel failure time estimation method for degradation analysis based on general nonlinear Wiener processes," Reliability Engineering and System Safety, Elsevier, vol. 230(C).
    13. Hui Chen & Jie Chen & Yangyang Lai & Xiaoqi Yu & Lijun Shang & Rui Peng & Baoliang Liu, 2024. "Discrete Random Renewable Replacements after the Expiration of Collaborative Preventive Maintenance Warranty," Mathematics, MDPI, vol. 12(18), pages 1-21, September.
    14. Sun, Fuqiang & Fu, Fangyou & Liao, Haitao & Xu, Dan, 2020. "Analysis of multivariate dependent accelerated degradation data using a random-effect general Wiener process and D-vine Copula," Reliability Engineering and System Safety, Elsevier, vol. 204(C).
    15. Zhengxin Zhang & Xiaosheng Si & Changhua Hu & Xiangyu Kong, 2015. "Degradation modeling–based remaining useful life estimation: A review on approaches for systems with heterogeneity," Journal of Risk and Reliability, , vol. 229(4), pages 343-355, August.
    16. 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).
    17. Xu, Qinqin & Zhu, Yuanguo, 2022. "Reliability modeling of uncertain random fractional differential systems with competitive failures," Chaos, Solitons & Fractals, Elsevier, vol. 162(C).
    18. Chang, Miaoxin & Huang, Xianzhen & Coolen, Frank PA & Coolen-Maturi, Tahani, 2023. "New reliability model for complex systems based on stochastic processes and survival signature," European Journal of Operational Research, Elsevier, vol. 309(3), pages 1349-1364.
    19. Liang, Qingzhu & Yang, Yinghao & Peng, Changhong, 2023. "A reliability model for systems subject to mutually dependent degradation processes and random shocks under dynamic environments," Reliability Engineering and System Safety, Elsevier, vol. 234(C).
    20. Ece Zeliha Demirci & Joachim Arts & Geert-Jan van Houtum, 2025. "A restless bandit approach for capacitated condition based maintenance scheduling," Flexible Services and Manufacturing Journal, Springer, vol. 37(1), pages 179-207, March.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    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:spr:waterr:v:37:y:2023:i:14:d:10.1007_s11269-023-03626-6. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.