Shizhe Peng

Shizhe Peng

Lecturer, Changsha University of Science and Technology

Posts by Collection

publications

[1] A review of condition-based maintenance: Its prognostic and operational aspects

Yanrong Li, Shizhe Peng, Yanting Li, and Wei Jiang*. (2020). Frontiers of Engineering Management, 7, 323–334.

Condition-based maintenance (CBM) detects early signs of failure and dictates when maintenance should be performed based on the actual condition of a system. In this paper, we first review some of the recent research on CBM under various physical structures and signal data. Then, we summarize several kinds of prognostic models that use monitoring information to estimate the reliability of complex systems or products. Monitoring information also facilitates operational decisions in production planning, spare parts management, reliability improvement, and prognostics and health management. Finally, we suggest some research opportunities for the reliability and operations management communities to fill the research gap between these two fields.

[2] A preventive maintenance policy with usage-dependent failure rate thresholds under two-dimensional warranties

Shizhe Peng, Wei Jiang*, and Wenhui Zhao. (2021). IISE Transactions, 53(11), 1231–1243.

This article considers Preventive Maintenance (PM) under a two-dimensional (2-D) warranty contract with time and usage limits. From a manufacturer’s point of view, we develop a dynamic maintenance model with a random horizon to include the impact of random and dynamic usage rates on PM decisions. The model treats the cumulative amount of usage as a state variable that provides information about the failure rate and the expiration of the 2-D warranty. We characterize the optimal PM policy by a sequence of usage-dependent failure rate thresholds. Each threshold is a function of the cumulative usage. Our failure rate threshold policy chooses one of the following two actions in each period: performing perfect PM or no PM. Specifically, the manufacturer should bring the failure rate back to its original level when it exceeds the threshold in the corresponding period. This policy is also optimal under a constant usage rate. In the numerical experiments, we demonstrate the effectiveness of the proposed policy and conduct a sensitivity analysis to investigate how this policy is affected by the model parameters.

[3] A new cost-sharing preventive maintenance program under two-dimensional warranty

Shizhe Peng, Wei Jiang, Lai Wei, and Xiao-Lin Wang*. (2022). International Journal of Production Economics, 254, 108580.

In this paper, we present a new cost-sharing preventive maintenance (PM) program for a product protected by a two-dimensional (2-D) warranty. The product is preventively maintained by its manufacturer in the warranty period and by a customer in the post-warranty period. To better coordinate their decisions, the cost of PM during the warranty period is borne jointly by both parties based on a fixed ratio. We propose a new way of designing such a cost-sharing PM program by using the customer’s expected post-warranty cost. We find a failure intensity threshold that determines whether the customer should carry out PM at the beginning of the post-warranty period. It is shown that cost sharing can reduce the failure intensity at this point, which in turn can reduce the customer’s expected total cost. Given a specific usage rate of the product, we then derive the optimal cost-sharing ratio from the customer’s perspective. In the numerical study, we examine the effect of usage rate on the optimal cost-sharing ratio as well as the benefits gained from cost sharing.

[4] The impact of gamma usage processes on preventive maintenance policies under two-dimensional warranty

Shizhe Peng, Wei Jiang, Wenpo Huang*, and Qinglin Luo. (2024). Reliability Engineering & System Safety, 242, 109743.

This study considers a manufacturer performing preventive maintenance (PM) on a product according to a one- or two-dimensional (2-D) policy. The one-dimensional PM policy is based on either time or usage, while in the two-dimensional case, PM is scheduled based on both scales. The product carries a 2-D warranty that offers protection for a certain amount of time and usage. Its cumulative usage is continuously monitored by the manufacturer and is assumed to follow a gamma process. In this context, we first propose a doubly stochastic Poisson process model for product failures where the stochastic intensity is influenced by the gamma usage process in an additive manner. We then explicitly derive the expected total costs of the two one-dimensional PM policies using the concepts of first hitting times and gamma bridges. For the 2-D PM policy, we express the associated cost in terms of the value function of a dynamic programming model. In the numerical experiments, we show how the variability of the usage process affects the costs of the three PM policies and find that the optimal 2-D policy degenerates into a one-dimensional policy.

[5] Extended warranty pricing in a competitive aftermarket under Logit demand

Xiao-Lin Wang, Shizhe Peng, and Xiaoge Zhang*. (2025). European Journal of Operational Research, 325, 541-552.

It is common for multiple firms—such as manufacturers, retailers, and third-party insurers—to coexist and compete in the aftermarket for durable products. In this paper, we study price competition in a partially concentrated aftermarket where one firm offers multiple extended warranty (EW) contracts while the others offer a single one. The demand for EWs is described by the multinomial logit model. We show that, at equilibrium, such an aftermarket behaves like a combination of monopoly and oligopoly. Building upon this base model, we further investigate sequential pricing games for a durable product and its EWs to accommodate the ancillary nature of after-sales services. We consider two scenarios: one where the manufacturer (as the market leader) sets product and EW prices simultaneously, and another where these decisions are made sequentially. Our analysis demonstrates that offering EWs incentivizes the manufacturer to lower the product price, thereby expanding the market potential for EWs. Simultaneous product–EW pricing leads to a price concession on EWs compared to sequential pricing, effectively reducing the intensity of competition in the aftermarket. Overall, the competitiveness of an EW hinges on its ability to deliver high value to consumers at low marginal cost to its provider. While our focus is on EWs, the proposed game-theoretical pricing models apply broadly to other ancillary after-sales services.

[6] Unraveling the causal mechanisms behind moral hazard in China’s auto industry

Esther Yanfei Jin, Shizhe Peng, Wei Jiang*, and Zhiqiang Zheng. (2026). Journal of Systems Science and Systems Engineering, accepted.

Moral hazard in auto insurance arises when greater coverage leads policyholders to drive less cautiously, increasing claim likelihood. While prior research has primarily examined the direct correlation between coverage and claims, limited attention has been paid to the underlying causal mechanisms, particularly the mediating role of driving behavior. This omission constrains insurers’ ability to design effective risk mitigation strategies. To address this gap, we propose a novel approach that integrates mediation analysis with the residual inclusion method, explicitly accounting for the endogeneity of coverage selection. Simulation results demonstrate that our method surpasses the existing approach in both identifying moral hazard and uncovering its causal pathways. We apply the method to China’s automobile insurance market, leveraging IoT devices that monitor driving behavior before and after policy acquisition. Empirical findings reveal no evidence of moral hazard. Instead, additional commercial coverage is associated with reduced driving risk compared to compulsory coverage.

talks

teaching

The economics of information

Undergraduate course, CSUST, Digital Economy, 2024

This course is an introduction to game theory and strategic thinking. Ideas such as dominance, backward induction, Nash equilibrium, evolutionary stability, commitment, credibility, asymmetric information, adverse selection, and signaling are discussed and applied to games played in class and to examples drawn from economics, politics, the movies, and elsewhere.

Data, models, and decisions

Undergraduate course, CSUST, Accounting and Financial Management, 2024

本课程旨在帮助学生掌握运用计算机技术解决各种经济管理理论与实务问题的思路与方法。课程内容并不涉及复杂的数学公式和繁琐的编程技术，而是通过充分运用EXCEL提供的丰富的分析与建模工具，开采和分析经济管理大数据，并建立动态的预测、决策、模拟模型，助力学生经济管理大数据处理能力的提升。本课程主要讲授计算机在经济管理中的多维数据分析处理、预测模型应用、管理决策建模等三方面的基本应用，既有很强的综合性和实践性，边学边做；又不同于一般的计算机课程，只讲技术；而且要求学生通过大量的实例操作，用EXCEL建立解决经济管理问题的可行方案。通过课程的学习，学生运用常用软件对房地产市场研判、投资项目评价、销售业绩分析等经济管理问题的定量分析和数据处理能力将显著提高，所掌握的各种经济管理理论和实务问题的计算机解决方法，对统计学、经济学、运筹学、保险、投资理论、市场营销等后续课程的学习有很大的帮助。

Microeconomics

Undergraduate course, CSUST, International Trade, 2026

微观经济学是有关人的行动和个人与社会合作的一种理论模型和思维方式。本课程将系统介绍微观经济学的基本原理及其在现实生活中的应用。通过学习本门课程，可以帮助你了解生活的世界，可以用原理来指导经济实践，启发自身对经济现象进行分析和判断。