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Game-Theoretic Contract Models for Equipment Leasing and Maintenance Service Outsourcing

There is a major trend that manufacturers sell their services to customers instead of selling their products. These services can be provided through leasing, warranty, or maintenance outsourcing. In this dissertation, we have studied leasing and maintenance outsourcing services from different aspects of reliability-based maintenance, game-theoretic decision making, and inventory and supply chain management. We have studied how different interactions and relationships between the manufacturer and customer in service contracting affect the decisions they make and the profits they gain. The methods used to tackle the related decision-making processes are stochastic modeling, non-convex optimization, game-theoretical framework, and simulation. For equipment leasing, two non-cooperative game-theoretic models and a cooperative model have been developed to describe the relationships between the manufacturer (lessor) and customer (lessee). Through the lease contracts, the lessor decides on the maintenance policy of the leased equipment, and the lessee decides on the lease period and usage rate. In the non-cooperative simultaneous move scenario, the lessee and the lessor act simultaneously and independently to make their decisions. In the leader-follower non- cooperative contract, the lessor is the leader who specifies the maintenance policy first, and the lessee, as the follower, decides on the lease period and usage rate accordingly. We have next determined the total maximum profit and shown that the Nash and Stackelberg equilibria are different from the total maximum solution. As a result, the players can increase their total profit by cooperation. We have implemented the cooperative solution as an equilibrium through a nonlinear transfer-payment contract. Our results illustrate that cooperation can be regarded as a value-added strategy in establishing such lease contracts. Besides, our numerical results show that although cooperation always increases the total profit of the players, the magnitude of increase is case specific. When the lease price is low or the revenue is high, the profits in the non-cooperative contracts will be close to the cooperative alternative, while the cooperation may increase the total profit significantly in other cases. For maintenance outsourcing, we have studied different bargaining scenarios in determining the contract terms. First, we have considered the Nash bargaining solution to compute the bargaining profit of players. Next, we have considered the case where players pose threat against each other in order to increase their own bargaining position. We have determined the optimal threat strategy for each player. Our result shows that although such threatening decreases the efficiency of the contract, it can dramatically increase the profit of the player with a higher bargaining position. We have finally provided a solution to the problem of how the service agent and customer can cooperate and negotiate on the price. We have determined the discounted price as a result of negotiation. Indeed, the discounted price induces the customer to choose the total maximum maintenance policy. Our numerical examples illustrate the feasibility of using such a price-discount contract in maintenance service outsourcing. Moreover, one can see that both the customer and agent can benefit from this price-discount contract.

Identiferoai:union.ndltd.org:arizona.edu/oai:arizona.openrepository.com:10150/612116
Date January 2016
CreatorsHamidi, Maryam
ContributorsLiao, Haitao, Son, Young-Jun, Fan, Neng, An, Lingling, Liao, Haitao
PublisherThe University of Arizona.
Source SetsUniversity of Arizona
Languageen_US
Detected LanguageEnglish
Typetext, Electronic Dissertation
RightsCopyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.

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