Marginal Break Even Between Maintenance Strategies Alternatives

Abstract

This article describes the maintenance strategies, their costs and decision how to choose one or another strategy. Maintenance costs are one of the biggest costs categories in life cycle costing so it is very hard to estimate them. This costs category has some unique estimation characteristics; one of them is that maintenance costs are spent during a long period. So estimation of material, spare parts or direct labour costs is very difficult therefore maintenance costs calculation is based mostly on assumptions. One of the maintenance classifications is based on maintenance strategies. The objective of any maintenance strategies is to minimize the total costs and maximize the asset operation time after setting preventive or corrective actions. Optimal decision is to pay attention to two main strategies – corrective and preventive maintenance. The purpose of corrective maintenance is to renew asset efficiency as soon as possible. Preventive maintenance is performed periodically before breakdown occurs. Correct costs allocation has the main impact on deciding about the maintenance strategies. However, only a few companies pay attention to costing and cost effectiveness analysis. Maintenance cost planning ensures assets productivity, safety and profit maximization. Life cycle profit can be improved by reducing costs, improving ownership effectiveness and efficiency related to operations and management, as well as improving support. But minimizing the costs does not necessarily result in maximized profit. Production equipment operation, maintenance, and support planning need to be based on market dynamics. Opportunities for profit may be lost because of unavailability caused by badly planned preventive maintenance, unplanned corrective maintenance, as well as ineffectiveness in operations and maintenance strategy. In order to choose which maintenance strategy shall be used marginal break even between maintenance strategies is calculated. The procedure is demonstrated according to one of the iteration methods - string method. The main aspect of this method is that the chosen interval should be isolating and it should meet all the requirements for isolating interval: 1. Function changes its sign in the interval; 2. The first derivative function does not change its sign in the interval; 3. The second derivative function does not change its sign in the interval. The calculation manifests that in the economical age 1.78 preventive maintenance costs are equal to corrective maintenance costs so it is worth to use preventive maintenance strategy starting from this point for Renault model vehicles.