A Decision Optimization Model for Leased Manufacturing Equipment with Warranty under Forecasting Production/Maintenance Problem

Zied Hajej,Nidhal Rezg,Ali Gharbi

doi:10.1155/2015/274530

Abstract

Due to the expensive production equipment, many manufacturers usually lease production equipment with a warranty period during a finite leasing horizon, rather than purchasing them. The lease contract contains the possibility of obtaining an extended warranty for a given additional cost. In this paper, based on the forecasting production/maintenance optimization problem, we develop a mathematical model to study the lease contract with basic and extended warranty based on win-win relationship between the lessee and the lessor. The influence of the production rates in the equipment degradation consequently on the total cost by each side during the finite leasing horizon is stated in order to determine a theoretical condition under which a compromise-pricing zone exists under different possibilities of maintenance policies.

Highlights

Due to the rapid advances in technology, the technological obsolescence appeared in the market at a quick rate with the new and better equipment
This study shows that it has novelty and originality relative to this type of problem, which considers and proposes a new maintenance strategy for leasing contract with extended warranty based on win-win relationship between the lessee and the lessor
This paper treats a forecasting production/maintenance problem correlated to the adoption of an extended warranty period for a leasing machine during a finite leasing horizon

Summary

Introduction

Due to the rapid advances in technology, the technological obsolescence appeared in the market at a quick rate with the new and better equipment. This study shows that it has novelty and originality relative to this type of problem, which considers and proposes a new maintenance strategy for leasing contract with extended warranty based on win-win relationship between the lessee and the lessor. This originality is characterised by the influence of the production variation rates on the machine degradation degree that is new in the literature charactering by analytical study that shows the evolution of the machine failure rate according to its use respecting at the same time the continuity of the equipment reliability from a period to another.

Problem Description

Mathematical Model

Maximum Additional Cost Paid for Extended Warranty

Minimum Price for Selling the Extended Warranty

Numerical Example

Conclusion