Two-Dimensional Lease Contract Model with Coordination for New and Used Equipment

This study proposed a two-dimensional lease contract - age and usage limits - for new and used equipment. Under the lease contract, the lessee agrees that an additional cost will be charged when the usage rate exceeds a threshold value. The lessor performs both preventive and corrective maintenance actions. The decision problem for the lessor is to find the optimal price of each lease option offered, and for the lessee is to select the best lease option. We modeled using a cooperative game theory formulation, and the optimal decisions for the lessor and the lessee are coordinated in order to reach a win-win solution.