J. Pongpech’s research while affiliated with Thammasat University and other places

Businesses need equipment to produce their outputs (goods/services). Equipment degrades with age and usage, and eventually fails (Blischke and Murthy 2000). This impacts business performance in several ways — reduced equipment availability, lower output quality, higher operating costs, increased customer dissatisfaction, etc. The degradation can be controlled through preventive maintenance (PM) actions whilst corrective maintenance (CM) actions restore failed equipment to its working state.

For leased equipment the lessor incurs penalty costs for failures occurring over the lease period and for not rectifying such failures within a specified time limit. Through preventive maintenance actions the penalty costs can be reduced but this is achieved at the expense of increased maintenance costs. The paper looks at a periodic preventive maintenance policy which achieves a tradeoff between the penalty and maintenance costs.

Purpose The aim of this research is to determine the optimal upgrade and preventive maintenance actions that minimize the total expected cost (maintenance costs+penalty costs). Design/methodology/approach The problem is a four‐parameter optimization with two parameters being k ‐dimensional. The optimal solution is obtained by using a four‐stage approach where at each stage a one‐parameter optimization is solved. Findings Upgrading action is an extra option before the lease of used equipment, in addition to preventive maintenance action. Upgrading action makes equipment younger and preventive maintenance action lowers the ROCOF. Practical implications There is a growing trend towards leasing equipment rather than owning it. The lease contract contains penalties if the equipment fails often and repairs are done within reasonable time period. This implies that the lessor needs to look at optimal preventive maintenance strategies in the case of new equipment lease, and upgrade actions plus preventive maintenance in the case of used equipment lease. The paper deals with this topic and is of great significant to business involved with leasing equipment. Originality/value Nowadays many organizations are interested in leasing equipment and outsourcing maintenance. The model in this paper addresses the preventive maintenance problem for leased equipment. It provides an approach to dealing with this problem.

This paper presents new sequential preventive maintenance policy model incorporating non-negligible repair time. The model focuses on the maintenance of leased equipment from the lessor perspective. Based on this model, the optimal number of preventive maintenance actions, time instants for such actions, and maintenance effectiveness for minimizing the total expected cost of lessor are determined. The results show that there are slightly differences between the model with negligible and non-negligible repair times.