Performance-based maintenance contract for a fleet of dump trucks used in mining industry

In this paper, we study two dimensional maintenance contracts for a fleet of dump trucks operated in a mining industry. We consider performance based service contracts which offer attractive incentives to motivate a service provider (an agent) to increase the equipment's performance beyond the target. This in turn gives benefit for both the owner of the trucks and the Agent of service contract. The situation under study is that an agent offers several two dimensional service contract options and the owner of the trucks needs to select the optimal option. We use a stackelberg game formulation in which the agent is as a leader and the owner as a follower to obtain the optimal strategy (pricing structure) for the agent and the optimal option for the owner.