Optimal Bayesian Maintenance Policies Following the Expiration of Combination Warranty

Abstract

This paper considers a Bayesian approach to determine an optimal maintenance policy following the expiration of combination warranty. The combination warranty policies can be divided by the renewing combination warranty and the non-renewing combination warranty. Given the cost structure to the user during the cycle of the system, we derive the mathematical formula for the expected cost rate per unit time. When the failure time is Weibull distribution with uncertain parameters, a Bayesian approach is established to formally express and update the uncertain parameters for determining an optimal maintenance policy. We show that there exists a unique optimal maintenance period following the expiration of combination warranty such that the expected cost rate per unit time is minimized. Some numerical examples are presented for illustrative purpose.