A game-theoretic model for outsourcing maintenance services

Maryam Hamidi, Haitao Liao, Ferenc Szidarovszky

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

6 Scopus citations


Proactive maintenance improves the operational availability of a system and increases the owner's profit. To create more economic value along this direction, it is popular to outsource maintenance services to a service agent. However, due to various uncertainties in equipment failures and spare part logistics, making a service agreement between the owner and the service agent can be quite complex. In this paper, a game-theoretic cooperative model is presented to facilitate contract negotiation in such a joint decision-making process. In particular, the owner determines the time for preventive replacement and the service agent makes up a plan on ordering a spare part such that their overall profit is maximized. To sign a long-term contract, the two players need to share the overall profit in a fair manner based on Shapley values that satisfy certain axioms of fairness. Numerical examples are provided to illustrate the solution methodology and to highlight the managerial implications in reliability and maintenance management.

Original languageEnglish (US)
Title of host publicationRAMS 2014 - Proceedings 2014
Subtitle of host publicationThe 60th Annual Reliability and Maintainability Symposium
PublisherInstitute of Electrical and Electronics Engineers Inc.
ISBN (Print)9781479928477
StatePublished - 2014
Externally publishedYes
Event60th Annual Reliability and Maintainability Symposium, RAMS 2014 - Colorado Springs, CO, United States
Duration: Jan 27 2014Jan 30 2014

Publication series

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


Other60th Annual Reliability and Maintainability Symposium, RAMS 2014
Country/TerritoryUnited States
CityColorado Springs, CO


  • cooperative game
  • renewal theory
  • replacement outsourcing

ASJC Scopus subject areas

  • Safety, Risk, Reliability and Quality
  • General Mathematics
  • Computer Science Applications


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