To maintain or not to maintain? What should a risk‐averse decision maker do?

Abstract

PurposeIn real‐life applications maintenance managers often face complicated decision problems under uncertainty. This difficulty increases when they have to take conflicting objectives into account. A recent review of the literature shows that previous works consider repairable systems subject to random failures and analyse trade‐offs between the costs and the benefits of maintenance activities. The risk aversion of the maintenance decision maker may be not underlined enough. This paper aims to deal with a single component system that has to accomplish a series of missions of a given length.Design/methodology/approachThe development of a maintenance strategy for this system is analysed from a risk aversion point of view. An attempt is made to highlight the attitude of a neutral decision maker versus a risk‐averse manager.FindingsPresents a very simple framework to analyse the risk aversion effect on managers' decisions. The model confirms the observation that risk aversion implies no‐monotone relation between optimality frequencies of maintenance operations and the deformation rate of the breakdown probability.Originality/valueSince the deformation rate is monotonic with time, the proposed model can be extended to derive optimal frequencies, which allow the implementation of the optimal deformation rates according to the probability law of the deformation rate δ.