Pricing and managing a maintenance contract for a fleet of aircraft engines

摘要

A large corporation wished to expand its role as a provider of maintenance and repair service for aircraft engines. These services were to be provided to airlines based on long-term contracts. The mag- nitude and uncertainty of the costs involved(total costs for a typical contract would be in excess of a billion dollars)could expose the corporation to sig- nificant financial risk. To help mitigate and man- age this risk, a simulation model was developed to assess costs over the life of the contract. The pri- mary objective was to establish a fair contract price. The simulation model also allowed opera- tional issues and sensitivities to be examined.