Renewable Warranty Policy Research Articles

Optimal preventive maintenance policies for products with multiple failure modes after geometric warranty expiry

In this paper, the optimal maintenance strategy for the warranty product subject to multiple failure modes and repair time limit is studied from the customer’s perspective. When the product fails, a minimal repair based on the failure type is conducted. If the product can not be repaired within a given time limit, it will be replaced with a new one by the manufacturer during the warranty period. Different from the traditional renewing warranty policy, a geometric warranty policy is adopted in this work, under which once the warranty product is replaced; the length of warranty period is geometrically renewed. After the warranty expires, the product undergoes preventive maintenance (PM) periodically and the PM effect is modeled by reducing the virtual age of different failure modes by different degree. The objective is to determine the optimal interval time for PM and the optimal number of PMs by minimizing the expected life cycle cost rate of product. The existence and uniqueness of the optimal PM policy are proved theoretically, and the optimal bivariate policy can be obtained by using a recursive seeking algorithm. Numerical examples illustrate the effectiveness of geometric warranty policy and the proposed PM model.

A new warranty policy for heterogeneous items subject to monotone degradation processes

A new renewable warranty policy is suggested that increases the probability of its success and can decrease the corresponding costs for certain ranges of parameters. It deals with heterogeneous populations of items from two subpopulations (‘weak’ and ‘strong’) and is aimed at elimination and further replacement of weak items after screening at some optimal time. This elimination is performed when degradation described by the corresponding mixed degradation process reaches some optimally predetermined level. Probabilistic and cost analyses of the model are performed and the illustrative example is presented. It is shown that the proposed warranty policy with inspection outperforms the conventional one in a probabilistic sense. Furthermore, the proposed policy becomes economically beneficial especially when the additional penalty cost caused by a sudden failure is large.

Two-stage renewing warranty policy with the threshold of maintenance times

Compared with non-renewing warranty, renewing warranty is more attractive to the customers. To reduce the possible cost pressure of the manufacturers, this study proposes a novel two-stage renewing warranty model with a threshold of maintenance times. Based on a preset allocation ratio, the warranty period is divided into two stages, i.e. the renewing warranty stage and the minimal repair warranty stage. In the first stage, when the number of maintenance actions exceeds the given threshold, the failed item will be replaced with a new one and attached with a new warranty period; otherwise, the product will enter the second stage when its operating time exceeds the time span of the renewing warranty stage. When the product fails in the second stage, only minimal repair is performed. On this basis, four types of maintenance schemes are proposed, and the corresponding warranty cost and profit models are developed to optimise the warranty policy. A numerical example is provided to illustrate the effectiveness of the proposed model, and sensitivity analysis is conducted. The results show that by considering the threshold of maintenance times, the warranty cost can be reduced and the manufacturer's expected profit can be improved simultaneously.

Optimal warranty policy with inspection for heterogeneous, stochastically degrading items

A new renewable warranty policy is suggested that increases probability of its success and can decrease warranty costs. An item from a heterogeneous population is inspected at some intermediate time during a warranty period and, if the observed level of degradation/wear exceeds some optimally predetermined value, it is screened out and replaced by the new one. Deterioration in homogeneous subpopulations of items is modeled by the inverse-Gaussian (IG) process, whereas heterogeneous populations are described by the mixed IG process. Probabilistic and cost analyses of the model are performed and the detailed illustrative example is presented and discussed.

Optimal condition-based renewable warranty policy for products with three-stage failure process

ABSTRACTA three-stage failure process divides a product’s life into three stages: normal, minor defective and severe defective stages. Under the condition-based renewable warranty policy, inspections are carried out to check which stage the product is in. Condition-based activities, such as shorting inspection intervals, preventive replacement and failure replacement, are carried out properly. From a manufacturer’s perspective, the inspection interval is optimized by minimizing the expected cost rate per unit time over the whole warranty coverage. For comparison, the expected cost rate per unit time for warranty models without inspections and with fixed interval inspections are also derived. Numerical examples show that condition-based renewable warranty policy replacement policy can reduce the manufacturer’s warranty cost significantly.

Optimizing two-dimensional renewable warranty policies for sensor embedded remanufactured products

Purpose: Remanufactured products, in addition to being environment friendly, are popular with consumers because they can offer the latest technology with lower prices in comparison to brand new products. However, some consumers are hesitant to buy remanufactured products because they are skeptical about the quality of the remanufactured product and thus are unsure of the extent to which the product will render services when compared to a new product. A strategy that remanufacturers may employ to entice customers is to offer warranties on remanufactured products. To that end, this paper studies and scrutinizes the impact of offering renewing warranties on remanufactured products. Specifically, the paper suggests a methodology which simultaneously minimizes the cost incurred by the remanufacturers and maximizes the confidence of the consumers towards buying remanufacturing products.Design/methodology/approach: This study uses discrete-event simulation to optimize the implementation of a two-dimensional renewing warranty policy for remanufactured products. The implementation is illustrated using a specific product recovery system called the Advanced Remanufacturing-To-Order (ARTO) system. The experiments used in the study were designed using Taguchi’s Orthogonal Arrays to represent the entire domain of the recovery system so as to observe the system behavior under various experimental conditions. In order to determine the optimum strategy offered by the remanufacturer, various warranty and preventive maintenance scenarios were analyzed using pairwise t-tests along with one-way analysis of variance (ANOVA) and Tukey pairwise comparisons tests for every scenario.Findings: The proposed methodology is able to simultaneously minimize the cost incurred by the remanufacturer, optimize the warranty price and period, and optimize the preventive maintenance strategy resulting in increased consumer confidence.Originality/value: This is the first study that evaluates in a quantitative and comprehensive manner the potential benefits of offering warranties with preventive maintenance on remanufactured products.

Cost models for age replacement policies and block replacement policies under warranty

In this paper, we elaborate on cost models by examining the renewable and non-renewable warranty policies subject to minimal repair within the warranty period and the post-warranty period. Among various maintenance policies, the block replacement policy and the age replacement policy have been investigated and compared under the broader warranty perspective. The cost model is developed from the perspective of the customer. This analytical model should provide manufacturers with a better understanding of customer behavior. We consider failure time and repair time simultaneously instead of the traditional two dimensions such as age and usage because it may be difficult to obtain usage information. For the customer's satisfaction, the repair time threshold, which has several types based on the properties of a product, is fixed. However, if the repair time exceeds the repair time threshold, the decision is to discontinue providing the repair service and to provide a replacement service. We obtain and compare the differences between maintenance policies using the expected cost rate, both under the non-renewable warranty policy and the renewable warranty policy. The suggested model provides better guidance for finding an optimal maintenance policy. Numerical examples are discussed to demonstrate the applicability of the methodology derived in the paper.

Renewable warranty policy for multiple-failure-mode product considering different maintenance options

Renewable warranty policy for multiple-failure-mode product considering different maintenance options

Optimal warranty policies considering repair service and replacement service under the manufacturer’s perspective

In this paper, under the manufacturer’s point of view, a warranty cost model is proposed in consideration of both repair service and replacement service simultaneously upon the system failure to find the optimized warranty period in terms of an expected cost rate during the warranty cycle. If a failed system can’t be repaired by the threshold warranty servicing time in the warranty service center, the replacement service is provided for the failed system instead of continuing to provide the repair service. Under such circumstance, new warranty cost models are developed and the renewable warranty policy is investigated for free and pro-rata two-dimensional warranty dependent on both failure time and warranty servicing time. From the manufacturer’s point of view, the warranty period is newly defined starting from the system’s purchasing time and ending at the expiration time of the warranty. This paper determines the optimal warranty period by applying Nelder–Mead downhill simplex method to minimize the expected cost rate during the warranty period. The real application is discussed adopting the proposed approach based on the actual field data and numerical examples are presented to exemplify the applicability of the methodologies derived in this paper.

System maintenance cost dependent on life cycle under renewing warranty policy

A number of optimal maintenance policies have been proposed and studied based on several types of warranty policies. As the criteria for optimality, the expected cost rate per unit time during the life cycle of the system is quite often used by many authors. However, the expected cost rate may depend on the length of life cycle and so the definition of life cycle plays a significant role in optimizing the maintenance policy. This paper considers a system maintenance policy during the post-warranty period under the renewing warranty policy and the life cycle is defined from the user's perspective. The life cycle starts with the installment of a new system and ends when the system is replaced by a new one at the expense of the user. In many renewing warranty models, the life cycle is defined as the lifelength of the new system installed initially, which is quite different from our definition. The expected cost rate per unit time is evaluated based on the life cycle newly defined and is compared with the existing results.

Optimal burn‐in time for general repairable products sold under failure‐free renewing warranty

PurposeTo investigate the optimal burn‐in time from the perspective of minimizing the expected total cost (i.e. manufacturing plus warranty costs) per unit of product sold under a failure‐free renewing warranty policy. The conditions indicating when burn‐in becomes beneficial were also derived.Design/methodology/approachAn age‐dependent general repairable product sold under a failure‐free renewing warranty agreement was considered. In the case of such a general repairable model, there are two ways in which the product can fail: type I failure (minor) can be rectified through minimal repairs; while in type II failure (catastrophic), the product must be replaced. Then optimal burn‐in time is then examined in order to achieve a trade‐off between reducing the warranty cost and increasing the manufacturing cost.FindingsThe optimal burn‐in time depends on the failure/repair characteristics, length of warranty, cost parameters and the probability of failure type II (catastrophic). A burn‐in program is beneficial if the initial failure rate is high or product failures during the warranty period are costly. Moreover, the optimal burn‐in time is always less than the infant mortality period.Originality/valueThe product considered in this paper is an age‐dependent general repairable product: on which no such study has yet been conducted. This is also the first study to apply a failure‐free renewing warranty to a general repairable item. It can be seen that the present model is a generalization of the model considered by Chien and Sheu.