Title: Game theoretic models in fleet performance-based maintenance contracts

Authors: H. Husniah; Andriana; Bermawi P. Iskandar

Addresses: Department of Industrial Engineering, Langlangbuana University, Bandung 40132, Indonesia ' Department of Industrial Engineering, Langlangbuana University, Bandung 40132, Indonesia ' Department of Industrial Engineering, Langlangbuana University, Bandung 40132, Indonesia

Abstract: A fleet performance-based maintenance service contract (PB-MSC) is a service offered by the original equipment manufacturer (OEM) or an external service agent (service provider) to a company that owns a dump truck fleet to support its business processes. The trucks are sold with two-dimensional warranty; preventive maintenance is a part of the warranty package. We study a PB-MSC which provides some incentives to the OEM or the agent if the performance (i.e., availability) of a fleet goes beyond the target. Two options of PB-MSC offered to the owner. The decision problems for the OEM (or agent) and the owner are formulated using the Stackelberg game theory, in which the OEM or agent acts as a leader and the owner acts as a follower. The pricing structure and the number of servers for the optimal strategy for the agent and the optimal option for the owner are obtained.

Keywords: fleet maintenance contract; two-dimensional warranty; expected profit maximisation; non-cooperative games.

DOI: 10.1504/IJBG.2020.109830

International Journal of Business and Globalisation, 2020 Vol.26 No.1/2, pp.41 - 56

Received: 03 Oct 2018
Accepted: 14 May 2019

Published online: 21 Sep 2020 *

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