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Optimal preventive maintenance strategy for leased equipment under successive usage-based contracts

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  • Xiaolin Wang
  • Lishuai Li
  • Min Xie

Abstract

In the context of equipment leasing, maintenance service is usually bundled with the leased equipment and offered by the lessor as an integrated package under a lease contract. The lessor is then responsible to prescribe an effective maintenance policy to keep the equipment operational in an economical way. This paper investigates upgrade and preventive maintenance (PM) strategies for industrial equipment during successive usage-based lease contracts with consideration of a warranty period, from the lessor's perspective. The accelerated failure time model and age reduction model are adopted to capture the effect of usage rate and imperfect PM/upgrade on the equipment reliability, respectively. More importantly, since equipment usage rates may vary across different lease contracts, this study develops an age correspondence framework to characterise usage rate shifts between successive lease periods. The optimal upgrade degree and the optimal number and level of PM actions are progressively updated for each upcoming lease period to minimise the total expected lease servicing cost, by considering the usage rate and maintenance implementation history. Numerical studies show that under given cost structures, periodical PM activities within each lease period tends to outperform the pre-leasing upgrade actions, though both of them can reduce the lease servicing cost.

Suggested Citation

  • Xiaolin Wang & Lishuai Li & Min Xie, 2019. "Optimal preventive maintenance strategy for leased equipment under successive usage-based contracts," International Journal of Production Research, Taylor & Francis Journals, vol. 57(18), pages 5705-5724, September.
    • Handle: RePEc:taf:tprsxx:v:57:y:2019:i:18:p:5705-5724
    DOI: 10.1080/00207543.2018.1542181
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    Cited by:

    1. Xia, Tangbin & Sun, Bowen & Chen, Zhen & Pan, Ershun & Wang, Hao & Xi, Lifeng, 2021. "Opportunistic maintenance policy integrating leasing profit and capacity balancing for serial-parallel leased systems," Reliability Engineering and System Safety, Elsevier, vol. 205(C).
    2. Zhao, Xian & He, Zongda & Wu, Yaguang & Qiu, Qingan, 2022. "Joint optimization of condition-based performance control and maintenance policies for mission-critical systems," Reliability Engineering and System Safety, Elsevier, vol. 226(C).
    3. Zhu, Mixin & Zhou, Xiaojun, 2023. "Hierarchical-clustering-based joint optimization of spare part provision and maintenance scheduling for serial-parallel multi-station manufacturing systems," International Journal of Production Economics, Elsevier, vol. 264(C).
    4. Wang, Xiaolin & Li, Lishuai & Xie, Min, 2020. "An unpunctual preventive maintenance policy under two-dimensional warranty," European Journal of Operational Research, Elsevier, vol. 282(1), pages 304-318.
    5. 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).
    6. Dai, Anshu & Wei, Guanzhou & Wang, Dongfan & He, Zhen & He, Shuguang, 2021. "The opportunity study of PM strategy for second-hand products sold with a two-dimensional warranty," Reliability Engineering and System Safety, Elsevier, vol. 214(C).

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