To read the full version of this content please select one of the options below:

Measuring life cycle costs for complex B2B products: A novel, integrated and practical methodology across disciplines for pricing maintenance contracts

Matthias Schlipf (Department of Business Administration, Munich University of Applied Sciences, Munich, Germany)
Carlos Keller (MAN Diesel and Turbo SE, Augsburg, Germany)
Fabian Lutzenberger (FIM Research Center, University of Augsburg, Augsburg, Germany)
Stefan Pfosser (FIM Research Center, University of Augsburg, Augsburg, Germany)
Andreas Rathgeber (Institute of Materials Resource Management, University of Augsburg, Augsburg, Germany)

Journal of Quality in Maintenance Engineering

ISSN: 1355-2511

Article publication date: 11 January 2019

Issue publication date: 23 April 2019

Downloads
217

Abstract

Purpose

The purpose of this paper is to develop a new interdisciplinary methodology to estimate the life cycle cost (LCC) of complex business-to-business products in order to price different types of maintenance contracts and show the applicability of the method in a case study. LCC comprise of initial capital costs as well of operation costs including probabilistic costs (such as the costs of repairs and spare parts), which are directly linked to the maintenance characteristics of the product.

Design/methodology/approach

The paper proposes an integrated and practical methodology that applies different approaches from different disciplines. Therefore, exponential distributions for failure rates in subsystems, World Bank logistics factors for logistics costs of spare part handling, as well implied credit default probabilities for the counterpart risk in full service leasing contracts are applied. In order to validate the applicability of the proposed methodology to practical problems, the tool is applied in three case studies.

Findings

The results of the case studies show that this methodology can be applied to analyze LCC structures of engines operating in various regions with regard to different types of engine maintenance contracts. The results also highlight the interplay of technical as well as financial risks.

Originality/value

Because the literature in maintenance engineering so far either proposes general frameworks to calculate LCC or concentrates on specific aspects of LCC, the paper contributes to the literature in presenting a new interdisciplinary methodology to estimate the LCC.

Keywords

Citation

Schlipf, M., Keller, C., Lutzenberger, F., Pfosser, S. and Rathgeber, A. (2019), "Measuring life cycle costs for complex B2B products: A novel, integrated and practical methodology across disciplines for pricing maintenance contracts", Journal of Quality in Maintenance Engineering, Vol. 25 No. 2, pp. 355-375. https://doi.org/10.1108/JQME-12-2017-0086

Publisher

:

Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited