Abstract

This paper focuses on analyzing the cost behavior of a free-repair warranty (FRW) policy with a preventive maintenance (PM) schedule for a complex product. We utilize a generalized Polya process to model the more general failure and repairs during the FRW coverage period. The expected cost function of the FRW with PMs is derived. We firstly prove that a unique optimal PM schedule exists for a FRW with a finite number of PMs, and then propose a search algorithm for computing the optimal number of PMs and their implementation times for a given FRW coverage period. A certain amount of numerical analysis is conducted to gain further insights into the FRW with PMs. Owing to the significant cost-saving advantages of scheduling PMs for the FRW, our study offers an important analytical tool for marketing managers in the design of more competitive and cost-effective warranty policies for complex and durable products.

Talk to us

Join us for a 30 min session where you can share your feedback and ask us any queries you have

Schedule a call

Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.