Optimizing Combination Warranty Policies Using Remanufactured Replacement Products from the Seller and Buyer’s Perspectives

Abstract

Growing awareness for sustainability and green legislation being implemented worldwide are forcing manufacturers and other organizations to recover and remanufacture used products to extend their lifecycles. These remanufactured products are send back to the marketplace or used in maintenance or used as replacement products to honour warranty offers. This paper presents the development and optimization of two mathematical models to determine the optimal combination rebate warranty policy when remanufactured products are used for replacements from both the seller and buyer’s point of view. Several numerical experiments are conducted to derive useful managerial knowledge and consumer guidelines.