Contracting for Performance-Based Maintenance Service under Profit Maximization  
Author J. Espiritu


Co-Author(s) C.-H. Sung; T. Jin; H.-Z. Huang


Abstract Performance-based maintenance (PBM) aims to lower the total ownership cost while ensuring the reliability performance of complex systems. A key challenge in implementing a PBM contract is how to allocate resources across the system lifecycle such that the reliability performance is warranted. We focus on integrated firms who design and manufacture capital equipment and also provide maintenance services. First we review five overarching performance metrics used for assessing the effectiveness of a PBM contract. Then a unified availability formula enveloping six key performance drivers is presented. Leveraging this new model, this paper formulates an optimization model to guide the execution of PBM contracts with the goal of maximizing the maintenance profit. The proposed method is demonstrated on wind turbines as they become the leading technology to meet the energy demand while controlling the carbon footprint in this century.


Keywords performance-based contracting, preventive maintenance, operational availability, spare parts logistics, wind turbines
    Article #:  18162
Proceedings of the 18th ISSAT International Conference on Reliability and Quality in Design
July 26-28, 2012 - Boston, Massachusetts, U.S.A.