An Agent-based Model for Flexible Customization in Product-Service Systems

Abstract

Product-Service System (PSS) models offer an integrated service solution to create value for businesses. In the high-value manufacturing sector, value creation for maintaining market competitiveness and improving customer satisfaction is a challenging task. Designing an effective PSS solution depends on integrated service, and product requirements and constraints. Thereby, PSS contract decisions can be significantly influenced by customers’ requirements, and also product and service features. However, existing literature primarily focuses on the impact of service requirements on the PSS contract decisions. Moreover, the existing insights for PSS customization mainly consider hysteretic customer requirements rather than forecasting the requirements under product and service uncertainties. In this paper, an agent-based cost-benefit analysis simulation model is implemented for the PSS contract decisions context. Moreover, a sensitivity analysis is conducted on service costs. Additionally, the effect of product remaining life on service contract decisions is analyzed. The simulation model considers stochastic uncertainty to study PSS contracts customization. The presented model supports PSS customization process by providing a quantitative tool that measures contracts’ profitability as early as the requirement elicitation phase. Furthermore, the bottom-up nature of the model, and the integration of probabilistic uncertainties enhance the flexibility of PSS customization. A case study of PSS contract decision in the machine tool industry is considered for assessing the validity of the presented model. Studies on different forms of service uncertainty highlight that the product failure rate has the most influence on the profitability of a service contract. Moreover, the impact of product age on profitability in an availability-based contract is more significant compared to a spare-parts contract.