Cost analysis of two-dimensional warranty for products with periodic preventive maintenance

Abstract

This study uses a bivariate approach, which simultaneously considers the time and usage of a repairable product, and takes into account periodic preventive maintenance to develop a two-dimensional warranty policy for the repairable product. The proposed model is based on the bivariate Weibull process to analyze the breakdown process of a repairable product simultaneously in terms of time and usage. A repairable product may be differently utilized by various customers. We consider two types of customers: (1) customers whose product warranty is terminated because the warranty time limit has reached first; (2) customers whose product warranty is terminated because the warranty usage limit has reached first, to perform cost analyses for determining an appropriate warranty policy. However, since it is often the case that the repairable product may be equally likely purchased by the two types of customers who are equivalently important to the product manufacturer; the optimal warranty policy would thus be the equilibrium solution of the cost analyses which pay the same attention to both types of customers in order to maximize the total profit of the manufacturer.