Redesign policy for a system with uncertain failure rates

Consider a newly developed system sold under a performance based contract (PBC), and subject to failures following various failure modes. Redesign may address certain failure modes. To trade-off redesign costs and costs associated with the PBC, we find the optimal failure modes to redesign based on...

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Bibliographic Details
Published inOperations research letters Vol. 54; p. 107093
Main Authors Ge, Qianru, Atan, Zümbül, van Jaarsveld, Willem
Format Journal Article
LanguageEnglish
Published Elsevier B.V 01.05.2024
Subjects
Bayesian inference
Multiple failure modes
Redesign policy
Stochastic dynamic programming
Stochastic dynamic programming
Redesign policy
Bayesian inference
Multiple failure modes
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ISSN0167-6377
1872-7468
1872-7468
DOI10.1016/j.orl.2024.107093

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Summary:Consider a newly developed system sold under a performance based contract (PBC), and subject to failures following various failure modes. Redesign may address certain failure modes. To trade-off redesign costs and costs associated with the PBC, we find the optimal failure modes to redesign based on the current beliefs on the failure rate per failure mode, and the amount of time remaining under the PBC. We develop analytic insights into the structure of the optimal policy.
ISSN:0167-6377
1872-7468
1872-7468
DOI:10.1016/j.orl.2024.107093