Performance-based contracting: a literature review and future research directions

Selviaridis, Kostas; Wynstra, Finn

doi:10.1080/00207543.2014.978031

Cited by 187 publications

(242 citation statements)

References 260 publications

Supporting

Mentioning

236

Contrasting

Unclassified

Order By: Relevance

“…An uptime-guarantee contract commits a service provider to maintain functionality of some equipment at least for certain fraction of working time during a contracted period. In this sense, an uptime-guarantee contract is a special form of performance-based contracts (see Selviaridis and Wynstra (2015) for a review). This paper addresses the optimal design of uptime-guarantee maintenance contracts.…”

Section: Introductionmentioning

confidence: 99%

Optimal design of uptime-guarantee contracts under IGFR valuations and convex costs

Hezarkhani

2017

European Journal of Operational Research

View full text Add to dashboard Cite

An uptime-guarantee contract commits a service provider to maintain the functionality of a customer's equipment at least for certain fraction of working time during a contracted period. This paper addresses the optimal design of uptime-guarantee contracts for the service provider when the customer's valuation of a contract with a given guaranteed uptime level has an Increasing Generalized Failure Rate (IGFR) distribution. We first consider the case where the service provider proposes only one contract and characterize the optimal contract in terms of price as well as guaranteed uptime level assuming that the service provider's cost function is convex. In the second part, the case where the service provider offers a menu of contracts is considered. Given the guaranteed uptime levels of different contracts in the menu, we calculate the corresponding optimal prices. We also give the necessary and sufficient conditions for the existence of optimal contract menus with positive expected profits.

show abstract

Section: Introductionmentioning

confidence: 99%

Optimal design of uptime-guarantee contracts under IGFR valuations and convex costs

Hezarkhani

2017

European Journal of Operational Research

View full text Add to dashboard Cite

show abstract

“…Transaction cost economics (TCE) represent the most prominent theoretical perspective to analyse modes of governance and institutional structures between hierarchies (internal) and markets (external) (Delmas, 1999;Selviaridis and Wynstra, 2014;Williamson, 1985). 'Servitization' refers to the outsourcing process as governance modes shift from hierarchies (in-house provision) to markets.…”

Section: Analytical Framework: Transaction Cost Economicsmentioning

confidence: 99%

Exploring the Role of Servitization to Overcome Barriers for Innovative Energy Efficiency Technologies The Case of Public LED Street Lighting in German Municipalities

2015

View full text Add to dashboard Cite

DisclaimerThe works available here are the responsibility of the individual author(s) and do not necessarily represent the views of other SPRU researchers. As matters of policy and practice, SPRU does not endorse individual research contributions. Guidelines for authorsPapers shall be submitted in pdf or Word format. They should contain a title, an abstract, and keywords. Papers should be submitted to one of the Editors, who will process them and send them to the appropriate Associate Editor. Two members of SPRU will be asked to provide a short written review within three weeks. The revised versions of the paper, together with a reply to the reviewers, should be sent to the Associate Editor, who will propose to the Editors its publication on the series. When submitting the authors should indicate if the paper has already undergone peer-reviewing, in which case the Associate Editors may decide to skip internal review process. SPRU Working Paper Series (ISSN 2057-6668)The SPRU Working Paper Series aims to accelerate the public availability of the research undertaken by SPRU-associated people of all categories, and exceptionally, other research that is of considerable interest within SPRU. It presents research results that in whole or part are suitable for submission to a refereed journal, to a sponsor, to a major conference or to the editor of a book. Our intention is to provide access to early copies of SPRU research.

show abstract

“…According to Guajardo et al (2012), "Performance-based contracting compensates the supplier based on the same outcome that the customer cares about (i.e., product utilization), and hence the supplier is motivated to increase product performance, associated with metrics such as product reliability and availability". Therefore PBCs are a certain type of service contracts, in which system performance translates into financial bonuses and penalties (Selviaridis and Wynstra, 2015). In the main model studied in this paper, we include the penalty side of a PBC contract.…”

Section: Introductionmentioning

confidence: 99%

Reliability optimization for series systems under uncertain component failure rates in the design phase

Peng

Houtum

et al. 2018

International Journal of Production Economics

View full text Add to dashboard Cite

. (2018). Reliability optimization for series systems under uncertain component failure rates in the design phase. International Journal of Production Economics, 196(2), 163-175. DOI: 10.1016163-175. DOI: 10. /j.ijpe.2017 General rights Copyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights.• Users may download and print one copy of any publication from the public portal for the purpose of private study or research.• You may not further distribute the material or use it for any profit-making activity or commercial gain • You may freely distribute the URL identifying the publication in the public portal ? Take down policyIf you believe that this document breaches copyright please contact us providing details, and we will remove access to the work immediately and investigate your claim. AbstractWe develop an optimization model to determine the reliability design of critical components in a serial system. The system is under a service contract, and a penalty cost has to be paid by the OEM when the total system down time exceeds a predetermined level, which complicates the evaluation of the expected cost under a given reliability design. Furthermore, in the design phase for each critical component, all possible designs are subject to uncertain component failure rates. Considering the computational intractability of evaluating the system performance, we develop approximate evaluation methods which take the system uncertainty into account. Numerical results show that the method which includes randomness in the number of failures, failure rates and repair times leads to efficient and accurate evaluations and to close-to-optimal design decisions when used in an enumeration procedure for the optimization problem. We also show that ignoring these three types of uncertainty may result in bad design decisions.

show abstract

Performance-based contracting: a literature review and future research directions

Cited by 187 publications

References 260 publications

Optimal design of uptime-guarantee contracts under IGFR valuations and convex costs

Optimal design of uptime-guarantee contracts under IGFR valuations and convex costs

Exploring the Role of Servitization to Overcome Barriers for Innovative Energy Efficiency Technologies The Case of Public LED Street Lighting in German Municipalities

Reliability optimization for series systems under uncertain component failure rates in the design phase

Contact Info

Product

Resources

About