Option O2 definition
Option O2 the expected profit profit of the owner is given by E [Profit)] = E[uptime revenue] + E[Pinalty cost] −E[Incentive cost] − E[Service Contract cost] − E[Purchase cost] E ⎡ϕ ⎤ = ϒ ⎧τ − N ( ,ν )∫∞ yg( y)dy ⎫ ⎣ y ⎦ ⎨ y 0 ⎬ ⎩ ⎭ + EP(L) − E [Incentive] − PG − Cb (7) W,U :Warranty time, and usage limits ▇▇ :Downtime caused by the i-th failure and waiting time ζ :Total repair time allowed D(t) :Total downtime in (0,t] F(t) :Distribution function of downtime ϒ , L :Revenue , maintenance contract leght Y :Usage rate Cr :Repair cost done by OEM Cm :Repair cost done by SP C0 :Preventive maintenance cost per PM Cv :Additional cost for level PM created per PM CP :Penalty cost per unit of time ▇▇ (O.) :Profit owner πy (O.) :Profit OEM Cb :The product cost over the contract period P0 :PM cost done in-house over the contract period F(t,αy ) :Conditional failure distribution for a given usage rate y ry (t), Ry (t) :Hazard, and Cumulative hazard functions associated with F(t,αy ) EP(L) is the expected penalty viewed as a