Risk-based dynamic pricing leveraging failure prediction
Equipment-as-a-service (EaaS) is gaining popularity in industries as it provides the customers with high flexibility and scalability and allows a service provider to optimize operations so that both the service provider and the customers benefit. The pricing modeling, however, is a key challenge in EaaS due to a change in the business objectives from selling products to providing services. In particular, EaaS can face severe high-cost issues as unexpected equipment failures can result in expensive downtime costs. My colleagues and I built a hybrid model that balances the costs and benefits of EaaS by using failure prediction (FP) in the predictive maintenance (PdM) domain and dynamic pricing.
