Contracting for system availability under fleet expansion: Redundancy allocation or spares inventory?

Tongdan Jin, Yisha Xiang, Heidi Taboada

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

Operational availability is a fundamental measure to assess the system performance after the installation. To achieve the desired availability goals, various strategies have been discussed, ranging from preventive maintenance, reliability-redundancy allocation (RRA), to spare parts logistics. RRA aims to extend the system uptime while spare parts logistics can reduce the downtime. These methods become difficult to choose if the fleet size changes over time. This situation often occurs in the new product introduction stage. This paper develops new cost model and analyzes the trade-off between redundancy allocation and spare parts stocking. Our model is built upon an integrated product-service mechanism where the firm manufactures the products and also provides after-sales support. We show that component redundancy is preferred over spare part inventory under long-term, performance-based contract. Examples from semiconductor equipment industry are used to demonstrate the application of the proposed method.

Original languageEnglish
Title of host publication2017 Annual Reliability and Maintainability Symposium, RAMS 2017
PublisherInstitute of Electrical and Electronics Engineers Inc.
ISBN (Electronic)9781509052844
DOIs
StatePublished - Mar 29 2017
Event2017 Annual Reliability and Maintainability Symposium, RAMS 2017 - Orlando, United States
Duration: Jan 23 2017Jan 26 2017

Publication series

NameProceedings - Annual Reliability and Maintainability Symposium
ISSN (Print)0149-144X

Conference

Conference2017 Annual Reliability and Maintainability Symposium, RAMS 2017
CountryUnited States
CityOrlando
Period01/23/1701/26/17

Keywords

  • Performance-based contract
  • Product-service integration
  • Reliability-inventory allocation

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