Improving Usage Metrics for Pay-per-Use Pricing with IoT Technology and Machine Learning

Servitization has attracted significant attention from the manufacturing industry for its potential to provide competitive advantage. Advanced services require alternative pricing models, such as pay-per-usage (PPU), but many support goods fail to produce countable output units, leaving few choices for billing metrics. However, this article proposes an improved set of usage metrics based on Internet of Things (IoT) technology and machine learning. These metrics capture value-in-use and allow for more accurate assessment of the depreciation, providing benefits to both the manufacturer and the customer and supporting the extension of PPU models to a wider range of industrial support goods and product-service systems.

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Volume 61, Issue 5, September-October 2018
Feature Article