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Journal of Industrial and Management Optimization
Article . 2021 . Peer-reviewed
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zbMATH Open
Article . 2021
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Bayesian decision making in determining optimal leased term and preventive maintenance scheme for leased facilities

Authors: Fang, Chih-Chiang;

Bayesian decision making in determining optimal leased term and preventive maintenance scheme for leased facilities

Abstract

<p style='text-indent:20px;'>Under a business competitive environment, quite a few enterprises choose capital leasing to reduce tax payment and investment risk instead of buying facilities. Since the durability and service life of leased facilities will be longer, the breakdowns and deterioration of leased facilities are inevitable during lease period. Accordingly, in order to reduce the related costs and keep the facility's health during lease period, preventive maintenances are required to perform to reduce the cost of free-repair warranty and maintain customers' satisfaction. However, performing preventive maintenance is not easy to scheme due to the scarcity of historical failure data. Accordingly, the study integrates lease and maintenance decisions into a synthetic strategy, and it can be applied under the situation of only expert's evaluation and/or scare historical failure data by employing Bayesian analyses. In this study, the mathematical models and corresponding algorithms are developed to determine the best preventive maintenance scheme and the optimal term of contract for leased facilities to maximize the expected profit. Moreover, the computerized architecture is also proposed, and it can help the lessor to solve the issue in practice. Finally, numerical examples and the sensitive analyses are provided to illustrate the managerial strategies under different leased period and the preventive maintenance policies.</p>

Keywords

Reliability, availability, maintenance, inspection in operations research, Bayesian problems; characterization of Bayes procedures, Compound decision problems in statistical decision theory, nature conjugate prior, preventive maintenance, Bayesian analysis, leased facility

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
1
Average
Average
Average
gold