Simulation Modelling of Availability Contracts

Abstract

Availability contract (also known as Performance-based Contract/Logistics) has been increasingly adopted in the context of Product-Service Systems (PSS). Despite the benefits, availability contract imposes major risks to the manufacturers due to the dynamic behaviour caused by the service delivery mechanisms. This paper aims to explore potential approaches that can be used to model the availability contract. The overall goal is to enable the manufacturers to assess the potential impacts of the contract to their manufacturing operations before actually committing to the changes. The work described in the paper involves the development of a simulation model from an example of an availability contract scenario. The outcomes from the simulation model provide an estimation of availability level, average delay and penalty cost subject to the given resource level and maintenance schedules. Based on this information, the OEM can decide whether the targets proposed in the contract is achievable. The outcome supports the potential and validity of the simulation approaches adopted in this study.