Maintenance Optimization Based on Three-Stage Failure Process under Performance-Based Contracting

Source abstract

As a new form of support contract, performance-based contracting has been extensively applied in both public and private sectors. However, maintenance policies under performance-based contracting have not gotten enough attention. In this paper, a preventive maintenance optimization model based on three-stage failure process for a single-component system is investigated with an objective of maximizing the profit and improving system performance at a lower cost under performance-based contracting. Different from conventional optimization models, the step revenue function is used to correlate profit with availability and cost. Then, a maintenance optimization model is proposed to maximize profit by optimizing the inspection interval. Moreover, the customers’ upper limit of funds is considered when we use the revenue function, which has rarely been considered in past studies. Finally, a case study on the cold water pumps along with comparison of linear and step revenue function and sensitivity analysis is provided to illustrate the applicability and effectiveness of our proposed approach.