A goal programming approach for multi-objective warranty optimization

Abstract

Due to severe competition in the market, a manufacturer may need to redesign the product warranty so as to get an edge over the competitors. However, to be able to do that, a systematic approach is required that allows one to consider multiple objectives. In this paper, a multi-objective optimization approach is presented considering warranty type, warranty duration, component alternatives and support level as decision variables. The multiple-objectives are in the form of targets to be achieved for warranty attractiveness index, warranty cost, spare parts cost to the end user over the useful life of the product and mean time between failures. In this paper a weighted goal programming approach for solving this problem is presented, where the weights are derived for the different objectives using the criteria importance through intercriteria correlation method and the objective function is formulated using the loss function approach. The warranty optimization approach is illustrated using a real life example of an automobile engine manufacturer and is solved using a multi-objective genetic algorithm with elitism strategy.