An optimal production/maintenance strategy under lease contract with warranty periods

Abstract

Purpose– The purpose of this paper is to investigate the optimal production policy and maintenance strategy for leased equipment under a lease contract with warranty periods. In order to have steady revenue, the lessor (owner) of the equipment may provide guaranty periods to encourage the lessee to sign a lease contract with a longer lease period.Design/methodology/approach– Under this production/maintenance scheme, the mathematical model of the expected total cost is developed and the optimal production planning and the corresponding optimal maintenance policy are derived by choosing the optimal warranty periods for the lessee in order to minimize the total cost.Findings– The influence of the production rates variation in the equipment degradation is considered by an increased failure rate according to both time and production rates. The impact of warranty periods on optimal maintenance planning will be studied thereafter. Finally, numerical examples are given to illustrate the analytical study and the effects of the warranty periods variation during the lease periods on the maintenance policy and consequently on the total cost.Originality/value– The paper proposes a new idea of production and maintenance coupling in the leasing aspect. This study shows that it has a novelty and originality relative to this type of problem which considers and proposes a new maintenance strategy for leasing contract. This originality characterized by the influence of two factors on the equipment maintenance strategy. First factor is the influence of the production variation production rates on the machine degradation degree that is new in the literature charactering by analytical equation that shows the evolution of the machine failure rate according to its use (which is in our case the production rate for each period) respecting in the same time the continuity of the equipment reliability for a period to another.