Performance-based MRO service contracts with two customer classes

As part of the paradigm shift in aerospace service contracts, a principal (e.g., an airline) now deals with only one agent (e.g., an aircraft integrator or Maintenance, Repair and Overhaul (MRO) service provider) - an agent can service any number of contracts. Due to the sporadic nature of unscheduled MRO, these integrators would stipulate a fee based on a detailed cost structure consisting of the amount of spares and effort required to service these packages. By doing so, the contractual value may be overpriced, thus making the provider less competitive, or underpriced, consequently incurring losses. This work aims to optimally value a service contract employing a multi-task principal-agent model to support resource allocation. We conclude this work with a fill rate analysis on two customer classes to distinguish between high and low priority demands.