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Reducing the customer's risk of down time is becoming increasingly important in the support of industrial and consumer durable equipment, whether sold or leased. Traditionally, improved support has meant improvements in diagnosis, repair, and spare part availability. However, these approaches eventually have diminishing returns. In many cases, dedicated loaners can be cost effective in eliminating or reducing down time. In this paper, models are developed to examine the trade-offs involved in decisions about loaners. Alternative loan policies are discussed, and the application of these policies is illustrated.
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