Performance based logistics (PBL) is emerging as a new after-sales contracting service for sustainment of equipment operational availability. Under the PBL strategy, we investigate a lifecycle-based model to minimize logistics footprint while meeting the reliability goal. We consider the situations where the fleet size stochastically increases over the contractual period, resulting in a non-stationary service demand stream. This scenario often occurs when new generations of equipment are progressively penetrating in the marketplace. A PBL-based optimization model is formulated and solved under a multi-echelon repairable inventory setting. The study shows that service providers can maximize the profit or minimize the cost by appropriately allocating resources to design, manufacturing, spare parts stocking, and repair facilities.
Secondly, we would like to share the research on energy management system in the smart grid domain. In particular, we introduce a new demand side management concept*virtual energy provisioning (VEP). The goal of VEP is to achieve energy conservation, power efficiency, and demand responses by redesigning the electricity supply chain, i.e. transforming the conventional "production-then-consumption" model into "order-then-production" paradigm. We will elaborate on the VEP concept, its architecture, the operational conditions, and the impacts on distributed generations and plug-in hybrid electric vehicles.