Abstract

This paper considers an optimal extended warranty policies after the expiration of base two-dimensional warranty with repair time threshold. During the base two-dimensional warranty period, each failure of the equipment can be either replaced or minimally repaired depending on a pre-specified repair time threshold. After the base warranty expires, the length of an extended warranty policy is available for selection. The equipment is minimally repaired on each failure during the extended warranty. In this study, the length of the extended warranty period is optimized by minimizing the expected cost rate incurred over the whole warranty coverage, from the views of customs and manufacturers respectively. For the purpose of illustration, we present and discuss some numerical examples. The effect of repair time threshold on the optimal strategy is also investigated numerically.

Highlights

  • Along with increasing the warranty period for complex systems, reducing the warranty servicing costs has become an issue of great importance to the manufacturers

  • Such a warranty policy is referred to as ‘‘two-dimensional warranty policy with repair threshold’’ throughout this paper. They obtained the optimal maintenance policy following the expiration of the warranty period by minimizing the expected cost rate per unit time during the life cycle of the system, from the customer’s perspective

  • Minimal repair is performed at no charge to the customer during the based and extended warranty period

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Summary

Introduction

Along with increasing the warranty period for complex systems, reducing the warranty servicing costs has become an issue of great importance to the manufacturers. These models under the traditional two-dimensional warranty policies have widely usefulness in various situations It may be difficult for many products to obtain their usage information, but their failure and repair time information can be obtained conveniently by manufacturers. Such a warranty policy is referred to as ‘‘two-dimensional warranty policy with repair threshold’’ throughout this paper They obtained the optimal maintenance policy following the expiration of the warranty period by minimizing the expected cost rate per unit time during the life cycle of the system, from the customer’s perspective. From the view of manufacturers, Park et al [17] determined the optimal warranty period to minimize the expected cost rate during the warranty. The length of the extended warranty period is optimized to minimize the expected cost per unit time over the whole warranty coverage. CMf3 w ce L′ r0 probability density function, cumulative distribution function, respectively independent, identically distributed random variable expected cost rate minimal repair-replacement renewable minimal repair-replace failure time and repair time, respectively density function, distribution function, and reliability function of T , respectively pdf, cdf and reliability function of Y , respectively total replacement cost the customer is responsible for during the based warranty period total failure stoppage cost the customer is responsible for during the warranty period total replacement cost the manufacturer is responsible for during the warranty period total minimal repair cost the manufacturer is responsible for during the warranty period unit cost of replacement unit cost of replacement stoppage during the based warranty period unit cost of minimal repair stoppage during the based warranty period unit cost of minimal repair stoppage during the extended warranty period unit cost of minimal repair during the base warranty period unit cost of minimal repair during the extended warranty period the length of the original warranty period unit cost for unit length of extended warranty period unit length of extended warranty period repair time threshold

Model formulation
Expected length of the warranty period
Expected cost rate from the view of customers
Expected cost rate from the view of manufacturers
Optimisation of the length of the extended warranty
The effect of the repair time threshold on the optimal strategy
Conclusions
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