Uncertainty in Through Life Costing within the Concept of Product Service Systems: A Game Theoretic Approach

DS 58-7: Proceedings of ICED 09, the 17th International Conference on Engineering Design, Vol. 7, Design for X / Design to X, Palo Alto, CA, USA, 24.-27.08.2009

Year: 2009
Editor: Norell Bergendahl, M.; Grimheden, M.; Leifer, L.; Skogstad, P.; Lindemann, U.
Author: Kreye, Melanie; Goh, Y. M.; Newnes, L. B.
Section: Design for X, Design to X
Page(s): 57-68

Abstract

By 2028 Rolls-Royce predict a civil after sales market opportunity of USD 550 billion and for military engines of USD 300 billion. Naturally, with this anticipated business Product Service Systems (PSS) have experienced a growth in interest by both industry and research. To achieve effective and profitable PSS, the Through Life Costs (TLC) of products/systems needs to be considered comprehensively. However, uncertainty in the estimation of future factors such as operation costs, level of maintenance and so on make this extremely challenging to estimate and model. The research introduced in this paper proposes that Game Theory might be of value for modeling the uncertainty in costs arising from conflict situations in the life cycle. Therewith, the decision making process can be modeled and so be made visible with its various implications. To introduce this proposed approach a review of the literature in PSS, TLC and uncertainty is summarized and then applied to this proposal.

Keywords: Product Service Systems, Through Life Cost, Life Cycle Cost, uncertainty, decision making, Game Theory

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