The use of IoT sensor data to dynamically assess maintenance risk in service contracts
Loeys, Stijn Boute, Robert N Antonio, Katrien
Loeys, Stijn
Boute, Robert N
Antonio, Katrien
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Publication Type
Journal article with impact factor
Editor
Supervisor
Publication Year
2025-07
Journal
European Journal of Operational Research
Book
Publication Volume
324
Publication Issue
2
Publication Begin page
454
Publication End page
465
Publication Number of pages
Collections
Abstract
We explore the value of using operational sensor data to improve the risk assessment of service contracts that cover all maintenance-related costs during a fixed period. An initial estimate of the contract risk is determined by predicting the maintenance costs via a gradient-boosting machine based on the machine’s and contract’s characteristics observable at the onset of the contract period. We then periodically update this risk assessment based on operational sensor data observed throughout the contract period. These sensor data reveal operational machine usage that drives the maintenance risk. We validate our approach on a portfolio of about 4,000 full-service contracts of industrial equipment and show how dynamic sensor data improves risk differentiation.
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Keywords
4605 Data Management and Data Science, 46 Information and Computing Sciences, Prevention