Journal of Systems Engineering and Electronics ›› 2024, Vol. 35 ›› Issue (1): 118-129.doi: 10.23919/JSEE.2024.000010

• SYSTEMS ENGINEERING • Previous Articles    

Design and pricing of maintenance service contract based on Nash non-cooperative game approach

Chun SU(), Kui HUANG()   

  1. 1 School of Mechanical Engineering, Southeast University, Nanjing 211189, China
  • Received:2022-11-28 Online:2024-02-18 Published:2024-03-05
  • Contact: Chun SU;
  • About author:
    SU Chun was born in 1970. He received his Ph.D. degree in mechanical manufacturing from Southeast University, China. He used to be a visiting scholar of University of Geneva, European Organization for Nuclear Research in Switzerland, and Rutgers University of USA. He is now a professor in the School of Mechanical Engineering at Southeast University, China. His research interests include reliability engineering and production system engineering. E-mail:

    HUANG Kui was born in 1997. He received his bachelor degree in 2018 and master degree in 2021 both of industrial engineering from Nanjing University of Aeronautics and Astronautics and Southeast University, China, respectively. He is working as an engineer in Nanjing, China. His research interests include reliability engineering and maintenance optimization. E-mail:
  • Supported by:
    This work was supported by the National Natural Science Foundation of China (71671035).


Nowadays manufacturers are facing fierce challenge. Apart from the products, providing customers with multiple maintenance options in the service contract becomes more popular, since it can help to improve customer satisfaction, and ultimately promote sales and maximize profit for the manufacturer. By considering the combinations of corrective maintenance and preventive maintenance, totally three types of maintenance service contracts are designed. Moreover, attractive incentive and penalty mechanisms are adopted in the contracts. On this basis, Nash non-cooperative game is applied to analyze the revenue for both the manufacturer and customers, and so as to optimize the pricing mechanism of maintenance service contract and achieve a win-win situation. Numerical experiments are conducted. The results show that by taking into account the incentive and penalty mechanisms, the revenue can be improved for both the customers and manufacturer. Moreover, with the increase of repair rate and improvement factor in the preventive maintenance, the revenue will increase gradually for both the parties.

Key words: maintenance service contract, Nash game, incentive and penalty mechanism, corrective maintenance, preventive maintenance