Optimal maintenance strategies for warranty products with limited repair time and limited repair number

Abstract

Nowadays, to protect the interests of customers, many warranty policies take into account the limit of repair time and the limit of repair number. Under a rebate warranty policy, the seller has to give a refund to the customer according to the rebate warranty contract if the number of product failures or a single repair time for failure exceeds some certain limits. Minimal repair is conducted when the product fails, and the repair cost is charged to seller during the warranty period. After warranty expires, the product continues operating for a period of time before being replaced. The repair cost during the post-warranty period is undertaken by the customer. From the customer’s perspective, the expected life cycle cost rate of the warranty product is derived. By minimizing the expected cost rate, the existence and uniqueness of the optimal maintenance strategy for the warranty product are proven theoretically. Finally, as an example, the warranty car under the protection of “lemon laws” is studied to illustrate the proposed rebate warranty model.