Bi-objective optimization of basic and extended warranty policies regarding preventive maintenance and burn-in policies: Weibull bathtub-shaped failure rate

Abstract

Today's after-sales services play an important role in the competitive market for product manufacturing and supply. The manufacturer, as the provider of basic warranty and third-party companies specializing in maintenance as extended warranty provider, seeks to minimize their costs, as well as improve product quality and customer attraction. In this regard, the application of burn-in policies can help the producer and the third-parties to achieve this. In this paper a nonlinear programming model is developed to (1) minimizing the total maintenance costs during the basic warranty and burn-in periods and (2) minimizing the total maintenance costs during the extended warranty period. Due to the complexity of the model, the multi-objective meta-heuristic solution approach is proposed based on a scatter search algorithm and variable neighborhood search algorithm. The optimization results showed that the application of burn-in policies by the manufacturer reduces the cost of preventive and corrective maintenance for the manufacturer and the third party. Also, the lack of a computational gap between the proposed solution approach and the exact solution method indicates the high efficiency of the proposed solution procedure through optimization of the research problem.