Optimal preventive maintenance of leased equipment

Abstract

A preventive maintenance model has been developed to assure reliability for increasing failure rate equipment, based on the minimization of total cost. Failures are modeled at the system level and by utilizing the black-box approach. When equipment fails, failures are rectified through minimal repair according to intensity function. The proposed model is applied to leased equipment from the lessor's perspective. It is the first model that incorporates maintenance issue with lease equipment. For lease equipment, the lessor carries out the maintenance of the equipment. Performance terms included in the lease contract and penalty for not meeting the performance standard have a significant impact on the total costs for the lessor. This implies that optimal preventive maintenance policy must take the penalty cost together with corrective maintenance cost into account and property trade against the preventive maintenance cost. the thesis deals with a preventive maintenance policy for new and used equipment lease. With new equipment, the policy is characterized by three parameters (i) the number of preventive maintenance actions to be carried out over the lease period, (ii) the time instants for such actions, and (iii) the level of actions. With used equipment, the lessor has an additional option to improve the reliability through an upgrade action before leasing