PERFORMANCED BASED TWO MAINTENANCE CONTRACTS FOR EQUIPMENT SOLD WITH TWO DIMENSIONAL WARRANTIES

摘要

In this paper, we study maintenance contracts for a two dimensional-warranted product. We consider a situation where an agent offers several service contract options and the owner of equipment has to select the optimal option. In mining industries, availability of the product is a key measure that needs to be controlled for achieving a company revenue. As a result, maintenance contract options need to consider the availability as a performance to be achieved. We obtain the optimal strategy (pricing structure) for the agent and the optimal option for the owner using a Stackelberg game formulation in which the agent is as a leader and the owner as a follower.