Managing a portfolio of long term service agreements

Long-term service agreements (LTSA) for the maintenance of capital-intensive equipment such as gas turbines and aircraft engines are gaining wide acceptance. A typical LTSA contract spanning a period of 10-20 years makes the manufacturer responsible for fully maintaining the customer equipment. In this paper, we address the management of a portfolio of such contracts from the manufacturer’s perspective. The goal is to meet all the service requirements imposed by the contracts while minimizing total cost incurred. We develop deterministic integer programming models to generate the optimal maintenance schedules that minimize the total portfolio cost.

• Type: Journal
• Year: 2007
• Where: EOR
• Authors: Srinivas Bollapragada, Aparna Gupta, Chaipat Lawsirirat
• Keywords: EOR 2007, Long-term Service Agreements, Total Portfolio Cost, Typical Ltsa Contract