Cost models for age replacement policies and block replacement policies under warranty

Abstract

In this paper, we elaborate on cost models by examining the renewable and non-renewable warranty policies subject to minimal repair within the warranty period and the post-warranty period. Among various maintenance policies, the block replacement policy and the age replacement policy have been investigated and compared under the broader warranty perspective. The cost model is developed from the perspective of the customer. This analytical model should provide manufacturers with a better understanding of customer behavior. We consider failure time and repair time simultaneously instead of the traditional two dimensions such as age and usage because it may be difficult to obtain usage information. For the customer's satisfaction, the repair time threshold, which has several types based on the properties of a product, is fixed. However, if the repair time exceeds the repair time threshold, the decision is to discontinue providing the repair service and to provide a replacement service. We obtain and compare the differences between maintenance policies using the expected cost rate, both under the non-renewable warranty policy and the renewable warranty policy. The suggested model provides better guidance for finding an optimal maintenance policy. Numerical examples are discussed to demonstrate the applicability of the methodology derived in the paper.