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Maintenance Contracts In Mining Industry

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Abstract – A two dimensional maintenance contracts with coordination between two parties is studied in this paper. The contract is applied to a dump truck operated in a mining industry. The situation under study is that an agent offers two dimensional service contract to the owner of the truck. The owner’s decision to get high availability and the agent’s decision to minimize the total maintenance cost are coordinated in order to reach a win-win solution. In addition, we consider the use of incentive contracts to the agent based on a combination of a target uptime level and a bonus. This is done in order to obtain a win-win situation and provides flexibility in allocating the extra profit generated from coordination. Keywords – two dimensional …show more content…

These equipments play an important role to support business processes in a mining company to ensure the company production target. As the equipments deteriorate with age and usage, an effective maintenance is needed to keep the equipments in a good condition. In turn it will give a high availability of the equipments. As the technology of such equipments tends to be complex and hence having maintenance facilities and maintenance specialists for conducting maintenance activities in house is far from economical. Often maintenance activities (including preventive maintenance (PM) and corrective maintenance (CM)) are outsourced to an OEM (original equipment manufacturer) or an external agent. OEM or an agent can do a partial or full coverage of the maintenance actions (Preventive Maintenance (PM) or/and Corrective maintenance (CM)). Preventive maintenance (PM) actions are done to prevent the excessive degradation (whether it is an age based or condition based maintenance), while corrective maintenance (CM) is performed to restore the failed equipment to the operational state. In general, OEM or an agent offers various maintenance service contracts to meet the requirement of a mining …show more content…

Notation The following notation will be used in model formulation. W,U :Warranty time and usage limits :Downtime caused by the i-th failure and waiting time  :Total repair time allowed , L :Revenue , maintenance contract lenght Y :Usage rate Cr :Repair cost done by OEM Co :Preventive maintenance cost per PM Cv :Additional cost for level PM created per PM Tr :Repair time done by OEM Tp :Preventive maintenance time per PM Tpv :Variabel cost for level PM created per

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