Study on Cost Minimization of Auto Engine Product Warranty Chain

Abstract

Aiming at how to optimize auto engine warranty cost, some hot issues such as what kind of factors auto engine warranty cost includes was studied deeply from the standpoint of reverse supply chain in this paper. First, the definition of auto engine warranty supply chain (AEWSC) was explained; then, under two-dimensional renewable free warranty policy, the components of AEWSC cost were analyzed for repairable engines. AEWSC cost covers not only traditional product warranty cost, but also potential cost resulting from re-failed engines; thirdly, an AEWSC Cost model was built based on cost analysis; finally, numeral analysis was developed through using the proposed cost model. The analysis results help engine manufacturer reduce AEWSC cost.