Prediction of service support costs for functional products

Abstract

In the functional product business model, a customer is provided with functionality at a guaranteed level of availability under a pre-agreed pricing structure whilst the provider retains ownership of the hardware and provides a service support system to deliver services such as maintenance. The ability to accurately predict the costs of supporting functional product contracts is crucial to the provider in correctly pricing those contracts and for the development and implementation of an efficient service support system. Since the costs incurred are performance based and accumulated over a long duration, they are difficult to predict without effective modelling and decision support tools. This paper discusses a decision support tool that has been developed to provide detailed analysis of the predicted long-term costs of supporting functional product contracts. The tool features a web based user interface to allow collaborative use of the tool by multiple users. The cost predictions are obtained through a discrete event simulation model that emulates the performance of the hardware and service support system used by the provider to fulfil the functional requirements specified in the contracts. The simulations are executed on automatically provisioned remote web based servers, meaning that the computing resources utilised are not limited by the user’s client device. The tool is demonstrated via application to an industrial test case.