The aim of this research is to determine the optimal upgrade and preventive maintenance actions that minimize the total expected cost (maintenance costs+penalty costs).
The problem is a four‐parameter optimization with two parameters being k‐dimensional. The optimal solution is obtained by using a four‐stage approach where at each stage a one‐parameter optimization is solved.
Upgrading action is an extra option before the lease of used equipment, in addition to preventive maintenance action. Upgrading action makes equipment younger and preventive maintenance action lowers the ROCOF.
There is a growing trend towards leasing equipment rather than owning it. The lease contract contains penalties if the equipment fails often and repairs are done within reasonable time period. This implies that the lessor needs to look at optimal preventive maintenance strategies in the case of new equipment lease, and upgrade actions plus preventive maintenance in the case of used equipment lease. The paper deals with this topic and is of great significant to business involved with leasing equipment.
Nowadays many organizations are interested in leasing equipment and outsourcing maintenance. The model in this paper addresses the preventive maintenance problem for leased equipment. It provides an approach to dealing with this problem.
