Planning performance based contracts of repairable system using discrete event simulation

This paper investigates a discrete event simulation approach for managing performance based contracts of repairable systems. We focus on an integrated service delivery environment where the manufacturer develops capital-intensive systems and also provides after-sales support. We propose a simulation model to calculate system availability comprehending four performance drivers: life time distribution, repair time distribution, spare parts inventory, and repair facility. This simulation model allows the service supplier to minimize the total cost by optimizing the four performance drivers. In this simulation model, the failure time and repair time can follow arbitrary distribution. This will allow the customer to monitor the supplier’s service through comparing the actual availability and its theoretical value. The costs of three maintenance policies also can be studied under the performance based contracts framework. Two cases are considered in this paper. One is a system containing single unit, one warehouse, and one repair center. Another is a system containing two fleets with different installed units, two spare part warehouses with one for each fleet, and a central repair depot.