Answers are grounded in this paper and cite their sources.
When it is not economical to carry out maintenance in-house, out-sourcing to an external agent is an alternate viable option. In this paper, we study a simple maintenance service contract involving a single agent (providing the maintenance service) and a single customer (owner of the equipment and recipient of the maintenance service). We develop a simple model to obtain the optimal strategies for both the customer and the agent. We give a complete characterization of the strategies along with some sensitivity analysis and discuss some extensions.
No takes yet. Share an insight, caveat, or question.
Murthy et al. (1998) studied this question.
Synapse has enriched 10 related papers. Consider them for comparative context: