Reward and Penalty Model for the Lighting of Public Thoroughfares Contracts: An Empirical Study in a Distribution Company

Lighting continuity is one of the preferences of citizens. Public lighting management from the viewpoint of city residents improves social welfare. The quality of lamps and duration of lighting defect correction is important in lighting continuity. In this regard, reward and penalty mechanism plays an important role in contract. Selecting labor and lamps has a significant impact on risk reduction during the contract period. This research improves strategies for public lighting asset management. The lifespan of lamp that announced by manufacturers is used to calculate maintenance cost in order to provide a possibility to estimate the actual cost of high-pressure sodium luminaire in public lighting system. Guarantee period of lamps and maximum permissible lighting defect detection and correction time is used for reward and penalty mechanism. The result shows that the natural life guarantee and permissible correction time have a considerable effect in maintenance cost and city resident’s satisfaction.