In this paper, we study a two-dimensional lease contract with preventive maintenance and servicing strategy involving imperfect repair. The lease contract coverage is characterized by two parameters – age and usage. The lessor will carry out preventive maintenance (PM) and a servicing strategy which allows more than one imperfect repairs under the contract. In the lease contract studied, we consider that a penalty cost incurred when the time required to perform an imperfect repair exceeds a target. This servicing strategy aims to reduce equipment failures and hence decreasing the penalty cost and maintenance cost during the leased contract. We find the optimal PM degree and the imperfect repair strategy such that the expected total cost is minimized. Numerical examples are presented to illustrate the optimal PM and servicing strategy for various usage rates (heavy, moderate and low usage rates), and compared results for this servicing strategy with those of minimal repair strategy.

ABSTRACT This paper develops a mathematical model to derive the optimal periodical preventive maintenance (PM) policy for a leased facility with Weibull life-time. Within a lease period, any failures of the facility are rectified by minimal repairs and a penalty may occur to the lessor when the time required to perform a minimal repair exceeds a reasonable time limit. To reduce failures of the facility, additional PM actions are carried out periodically during the lease period. When the life-time distribution of a product is Weibull, the optimal number of PM actions and the corresponding maintenance degrees are derived such that the expected total maintenance cost is minimized. The structural properties of the optimal policy are investigated and an efficient algorithm is provided to search for the optimal policy. Finally, numerical examples are provided to illustrate the features of the proposed model.

This paper investigates the effects of preventive-maintenance cost functions on the optimal preventive-maintenance policy for a leased product with Weibull life-time distribution. During the lease period, any product failures are rectified by minimal repairs and may incur a penalty to the lessor, if the time duration for performing a minimal repair exceeds a pre-specified time limit. To reduce repair costs

This paper investigates the optimal length of lease period and maintenance policy for leased equipment. In order to have steady revenue, the lessor (owner) of equipment may provide a discount to encourage the lessee (user) to sign a contract with a longer lease period. However, as the lease period increases, the maintenance cost also increases due to the deterioration or usage of the equipment. Therefore, there is a need to determine an appropriate length of lease period and a corresponding maintenance policy for the leased equipment from the viewpoint of the lessor such that the expected total profit is maximized. In this paper, the following maintenance scheme is considered. When the leased equipment fails, a minimal repair is conducted to bring the equipment back to an operating condition. Furthermore, when the age of the equipment reaches a specified level (called as a control-limit), an imperfect preventive maintenance (PM) is carried out to avoid possible failures. Under this ...

ABSTRAK In this paper we study a customized two-dimensional lease contract for a fleet of public transport, such as buses, shuttle etc. The lease contract are characterized by two parameters – age and usage – which define a two-dimensional region. However, we use one dimensional approach to model these age and usage of the fleet. The contract is classified into three categories usage rate with different operating conditions and then different preventive maintenance (PM) schedules are applied to the contract in the different categories. Periodic preventive maintenance is considered to meet different contract requirements to ensure the reliability of the fleet. Fleet with high utilization rates could have satisfactory reliability by performing more frequent PM, while those with low and medium utilization rates could reduce the cost of PM within the lease contract. We further assume that there will be three different usage pattern of the buses, i.e. low, medium, and high pattern of the...

We develop a non-tax rationale for leasing in a double-sided asymmetric information setting, and analyze how various contractual provisions in leasing contracts arise in equilibrium. In our model, a manufacturer of capital goods has private information about their quality; entrepreneurs (users of these capital goods) come to learn this quality only by using them over a period of time. Each unit of the capital goods requires a certain level of maintenance in each period. Entrepreneurs differ in their cost of providing this maintenance; this maintenance cost is information private to each entrepreneur. Leasing emerges as an equilibrium solution to this double-sided asymmetric information problem. Various contractual provisions in leasing contracts (e.g., short-term versus long-term leases with non-cancellation provisions, option to buy at lease termination, and service leases) also emerge as equilibrium solutions under alternative settings. Leases with metering provisions emerge in equilibrium when, in addition to the maintenance cost, entrepreneurs differ in other dimensions, such as their intensity of usage of the capital good. Our model has implications for the lease-versus-sell decision, the situations under which various leasing contract provisions will be used, and for the relative magnitudes of sales prices and leasing costs (for leases with different contractual provisions).