Warranty Policy Research Articles

Spare parts provisioning strategy of warranty repair demands for capital-intensive products

The inventory cost of stocking spare parts is a nonnegligible expenditure of providing after-sales service for the manufacturers making capital-intensive products, such as electric vehicles. Especially, for warranty repair service, it is important to manage the spare stock appropriately to satisfy the warranty claims of customers as well as reduce the associated inventory costs. In this paper, we investigate the spare parts inventory issue related to a critical component for under-warranty units of a product. In particular, under the free-replacement warranty policy, failed component will be replaced by a new one by consuming the spare stock. According to the field claim data, we find that the general trend of warranty claims is nonstationary, which will be affected by the product sales and under-warranty failures. Thus, we first propose a model to forecast the time-varying warranty repair demand by explicitly considering the randomness from two major sources, that is, product sales and under-warranty failures. Under the assumptions of Poisson sales process and exponential failure distribution, the closed-form expressions of mean and variance of cumulative warranty repair demand over time are obtained. Because the number of warranty claims in each period is a one-time data, the associated distribution information is unavailable. Then, based on the properties of the demand statistics, we derived a worst-case upper bound for the associated inventory cost and formulate a three-phase finite-horizon spare parts inventory model, which can be used to appropriately address the time-varying warranty claims. Finally, numerical experiments are conducted to investigate the key parameters affecting the optimal decisions where a case study based on real data is presented.

Stochastic Analysis of an Industrial System with Preparation Time Repair under Warranty Policy

The main purpose of this study is to examine the behavior of certain industrial systems under the conditions of product warranty policy. Given this policy, we are interested in considering all the parameters of the system in order to study them and show their impact on the proposed system. In order to increase the efficiency of the system and activate the product warranty policy, the system will undergo a preliminary examination for any system failure occurrence to determine the reasons that led to the failure. After completing the initial inspection, the mechanic will decide whether it is a user-caused failure or a manufacturing defect to determine whether or not the repair of the broken appliance is covered by the manufacturer’s contractual warranty policy. All times in the system are assumed as a negative exponential distribution. The expressions for some measures of system effectiveness such as reliability, mean time to system failure (MTSF), and availability are derived using the supplementary variable technique and Laplace transform. Sensitivity analysis and a relative sensitivity are then carried out in order to recognize how each system parameter affects performance measures. Finally, some numerical examples are designed and performed to show how the change of each system parameter affects system performance.

Two-dimensional warranty policy design with the consideration of protection term

In practice, car products are sold with 2-dimensional (2D) warranty policies, on which existing literature usually assumes that the products are repaired upon failures throughout the warranty period. However, this is not always the case in real life; for example, car manufacturers may need to replace defective cars during an early period of warranty, when the total time on repairing the failures reaches a specified repair time constraint or the number of repair attempts reaches a specified repair number constraint. Motivated by this, this paper divides a warranty period into two stages: the initial protection term and the subsequent repair stage. During the initial protection term, the manufacturer needs to provide a replacement service when a specified replacement condition is satisfied; while during the subsequent repair stage, the manufacturer should provide repair services upon product failures. Taking the warranty servicing cost into account, a profit model is built. The expected total profit of the product is derived, and the optimal warranty period and product price are designed to maximize the manufacturer’s profit. Finally, numerical experiments on car examples are provided to illustrate the considered warranty policy with protection term.

Modeling Software Release Time and Software Patch Release Time Based on Testing Effort and Warranty

In this world of software technology, our dependency on software’s is increasing continuously. As a result, software industries are working hard to develop highly reliable software and to meet the expectation of customers. Generally, software companies release software early in market to take gain market share, but rigorous software testing is required for early release software to ensure reliability of software and meet the customer’s expectations. This requires a huge amount of resources, and it increases financial burden on the company, consequently, decreases the overall profit of company. Further, late release due to prolong testing of a software may improves reliability but results into a loss of market opportunity cost or may not be fulfil the customer’s aspirations. As a result, to stay competitive, companies release software early and release patches later to fix the bugs, improve the functionality of software, and to update the software. Software industries are improving the performance or usability of software by releasing patches which may increase the consumption of testing effort and consequently increase in cost. On the other hand, software firms also provide warranty on their products. To address the above said issues, we have developed a testing effort-based software reliability growth model, which incorporates warranty policy and estimates the optimal software release and patch time with the objective to minimise the total testing cost. Further, we have used Genetic Algorithm (GA) to estimate optimum software release and patch time. A numerical illustration has been presented on a real time data set to validate the proposed model.

Managing Materials Vendor Risks for Improved Project Operational Performance

Highlight: Sound risk management implementation is well noted for helping organisations to overcome operational inefficiencies. However, the management of risk associated with construction materials vendors, and how they impact project operational performance appear to have not been extensively researched. Goal: In this study, the effect of materials vendor risk management (vendor risk identification and vendor risk prevention) on project operational performance (project quality and scheduled completion time) was investigated. We also interrogate the mediating role of risk-oriented culture in the relationship between vendor risk management and operational performance. Design/Methodology/Approach: The target population was all 1,044 registered public construction firms under the Urban Regeneration Programme in Nigeria. The cross-sectional survey design was adopted, and random sampling was used to select 173 project managers, engineers, surveyors, vendors/contractors, and store representatives. Primary data was collected through the structured questionnaire, they were analysed via the Structural Equation Modelling (SEM) technique. Results: Three main conclusions are made about managing vendor risks: First, properly identified materials vendor risks (in terms of material handling issues, price escalation, non-compliance to specification, delivery delay, and sharp procurement practices) is positively related to operational performance. Second, implementing context-specific risk prevention measures (prior assessment score, vendor financial capacity, warranty policy, continuous monitoring, technical capacity) positively enhances operational outcomes. Third, paying attention to risk culture orientation of project stakeholders positively impact their risk prevention capability and operational performance of construction projects. Limitations: Study was limited to few operational performance indicators in project management. Future study could include other performance indicators. Practical Implications: The results can help project operations managers in industry address numerous risks associated with materials vendor. Originality/Values: The numerous abandoned and failed construction projects in developing countries as a result of less attention to vendor risks management prompted this study.

A Sustainable Supply Chain Model with a Setup Cost Reduction Policy for Imperfect Items under Learning in a Cloudy Fuzzy Environment

The present paper deals with an integrated sustainable supply chain model with the effect of learning for an imperfect production system under a cloudy fuzzy environment where the demand rate is treated as a cloudy triangular fuzzy (imprecise) number, which means that the demand rate of the items is not constant, and shortages and a warranty policy are allowed. The vendor governs the manufacturing process to serve the demand of the buyer. When the vendor supplies the demanded lot after the production of items, it is also considered that the delivery lots have some defective items that follow an S-shape learning curve. After receiving the lot, the buyer inspects the whole lot, and the buyer classifies the whole lot into two categories: one is the defective-quality items and the other is the imperfect-quality items. The buyer returns the defective-quality items to the seller after a screening process, for which a warranty cost is included. During the transportation of the items, a lot of carbon units are emitted from the transportation, damaging the quality of the environment. The seller includes carbon emission costs to achieve sustainability as per considerations. A one-time discrete investment is also included for the minimizing of the setup cost of the seller for the next cycles. We developed models for the scenario of the separate decision and for the integrated decision of the players (seller/buyer) under the model’s consideration. Our aim is to jointly optimize the integrated total fuzzy cost under a cloudy fuzzy environment sustained by the seller and buyer. Numerical examples, sensitivity, analysis limitations, future scope and conclusions have been provided for the justification of the proposed model, and the impact of the input parameters on the decision variables and integrated total fuzzy cost for the supply chain are provided for the validity and robustness of this proposed model. The effect of learning in a cloudy fuzzy environment was positive for this proposed model.

Reliability modeling and warranty optimization for products with self-healing under a dynamic shock environment

As modern products evolve in intelligence, self-healing mechanisms have been gaining prominence in the field of reliability. In actual operation, the performance of a product is inevitably influenced by external environments and user interactions. However, existing warranty studies often overlook these factors, leading to oversimplifications in product reliability modeling. This paper offers a comprehensive and realistic view of the product failure process by integrating the dynamic shock environment, inherent self-healing property, and post-sale consumer utilization. The constructed reliability evaluation model accounts for fatal and non-fatal shocks with a dynamic time-varying failure threshold. We introduce the concept of self-healing trigger/delay time, considering a generalized self-healing process. The approximate product reliability is derived, and its accuracy is validated using Monte Carlo simulations. Then, derived from real-world practices, we propose a novel two-stage warranty policy which combines lemon law principles with preventive maintenance. By minimizing the expected cost rate throughout the warranty service period, a preventive maintenance schedule optimization model is developed from the manufacturer's perspective. Finally, a numerical case is presented to reveal the influences of different factors on product reliability and demonstrate the existence of the optimal solution.

A study on two‐dimensional warranty with a preventive maintenance policy under burn‐in or run‐in

AbstractProducts are often offered with warranties, which have become a common marketing strategy intended to indicate that product quality is guaranteed by the firm. Warranties can attract consumer purchases, but they also incur warranty costs, especially when firms falsely claim that their products are high quality; therefore, the determination of an appropriate warranty policy is of particular importance. This study considers a two‐dimensional warranty for complex repairable products, such as a vehicle, a lathe, or industrial machinery, with consideration of (1) burn‐in (run‐in), which is a supervised accelerating testing process performed before product launch to prevent defective products from being sold on the market, and (2) periodic preventive maintenance, which is performed during the usage period to prevent the occurrence of unexpected failures under normal usage conditions. The optimal burn‐in (run‐in) time and preventive maintenance intervals are determined with the aim of minimizing warranty costs for firms. The results of the study show that given a higher repair cost and a greater infant mortality failure rate, more frequent preventive maintenance is preferable, and the repair cost has the largest effect on the total warranty cost for the firm.

Analysis of The Relationship Between Warranty and Returns on Consumer Loyalty at Car Dealership in the Application of Conditional Khiyar

This research aims to analyze the relationship between the warranty policy and return policy implemented by the Medan Daihatsu Car Dealer and the level of consumer loyalty, especially in the application of the Conditional khiyar principle in business transactions. The research method used was a quantitative approach using a questionnaire as a data collection instrument, the number of samples used was 60 respondents. The data analysis technique uses multiple linear regression analysis and the hypothesis tests are the t test, F test and coefficient of determination which are processed with SPSS 25 Version software. The collected data will be analyzed using statistical techniques such as regression to assess the relationship between the variables studied. Apart from that, this research can also be a reference for further research in the field of marketing management and business law related to the implementation of conditional khiyar in business transactions.

Energy-based availability warranty policy with considering preventive maintenance and learning-forgetting effect

Ensuring reliable operation and maximum the output is crucial for energy production systems. Traditional time-based availability (TBA) warranty policies often overlook some factors, such as energy loss and the experience gained during the maintenance activities. In this paper, an innovative warranty policy which focuses on the energy-based availability (EBA) is proposed, where imperfect preventive maintenance (IPM) and minimal repair (MR) are taken into account, and hybrid hazard rate model is adopted to describe the effect of preventive maintenance. In addition, the learning-forgetting effect during the maintenance is considered. On this basis, six types of single-objective and multi-objective models are established, and they are solved by genetic algorithm (GA) and non-dominated sorting genetic algorithm-II (NSGA-II), respectively. To illustrate the effectiveness of the proposed warranty policy, a numerical case of wind turbine gearbox is conducted. The results show that the proposed EBA warranty policy can gain around 0.29% energy more than TBA policy. Compared to single-objective models, multi-objective models can provide more selectable maintenance options. Additionally, sensitivity analysis indicates that by considering the learning-forgetting effect, the gearbox can achieve higher EBA and lower warranty cost.

Joint optimization of inspection and condition-based maintenance for a deteriorating product under extended warranty

Condition-based maintenance (CBM) has been widely applied in engineering practice, but it has been rarely integrated into extended warranty policies. When the inspection cost is high, it becomes important to schedule the inspection plan when making CBM decisions. This paper jointly optimizes inspection and CBM for a deteriorating product under extended warranty. The deterioration of the product is characterized as a non-stationary gamma process. At each inspection epoch, the decision maker needs to determine whether to repair the product and when to perform the next inspection. The objective is to simultaneously optimize the inspection policy and the maintenance policy that minimize the warranty servicing cost. The joint optimization problem is formulated by stochastic dynamic programming. The optimal policy is proven to be of a control-limit form. A backward induction algorithm integrating the obtained structural properties is proposed to find the optimization results. A numerical example is conducted to illustrate the effectiveness of the proposed approach. A graphical representation of the obtained policy is provided to support practical maintenance implementation. The comparison with a popular CBM policy confirms the superiority of the proposed policy.

Combination Warranty Optimization Model Using Reconditioned Parts Under Age Uncertainty

Remanufacturing processes such as refurbishing and reconditioning of used products is one pillar of sustainable manufacturing as, not only, it provides financial opportunities, but also allows manufacturers to engage in sustainable practices. The remanufactured products are typically used as spare parts in maintenance or as replacement products to honor warranty contracts. The present paper develops a mathematical optimization model to determine the optimal combination warranty policy when remanufactured products with uncertain age are used for warranty replacements after being upgraded by the original equipment manufacturer. Numerical experiments are conducted to illustrate the validity of the proposed approach.

Ku ustawie z 17 maja 1989 r. Ewolucja postaw władzy wobec Kościoła i idei wolności sumienia i wyznania w Polsce

Freedom of conscience and belief belongs to basic human rights. Furthermore, they stay under the influence of individual generations of human rights, European and international law, judgments of courts and constitutional tribunals. Freedom of conscience is identical to liberty of thoughts and beliefs. These rights are guaranteed by countries and are determinant of their rule of law. On the 17th of May 1989, the Sejm of the Polish People’s Republic adopted a law on guaranteeing conscience and belief freedom. The purpose of this elaboration was to present the evolution of the attitude of the socialist country authority towards the Church and the idea of the freedom of conscience. There were also selected premises that contributed to the elaboration of this act: documents of international law and political trials that had an impact on the authority’s attitude. Attention was paid to the difficult relationship between the Church and the country in the 40s and 50s and the effect of human rights development, that was implemented by international organizations, particularly by ONZ, UNESCO, and CSCE on warranty policy for conscience and belief freedom in Poland. The country-Church relationship was shown in the declining period of PPR. The process of preparing the law from 17 May 1989 was examined.

Integrated Sustainable Product Design With Warranty and End-of-Use Considerations

Abstract The concept of integrated sustainable product design has recently emerged, aiming to incorporate downstream life cycle performance into the initial product design to enhance sustainability. Various sustainable product design tools based on life cycle assessment or quality function deployment have been established while the impact of reliability on circular practices has received limited attention. Recognizing the critical role of product reliability in post-design performance, this paper develops a product design optimization model that considers the warranty performance and the effect of end-of-use options. The model takes into account the effect of uncertain operating conditions on product reliability. Two optimization goals including the minimization of expected unit life cycle cost and environmental impact are achieved by the model. To demonstrate the benefits of the integrated approach, the model is applied to an electric motor design problem. The results highlight that integrating end-of-use options in the early design phase leads to adjustments in component selection and reliability design. Moreover, the circular utilization of used products enables cost savings throughout the product’s life cycle and contributes to environmental impact reduction. Lastly, the study analyzes the effects of operating conditions, warranty policies, and take-back prices for used products on design decisions, providing valuable insights for product designers.

Optimal Decision for Repairable Products Sale and Warranty under Two-Dimensional Deterioration with Consideration of Production Capacity and Customers’ Heterogeneity

An effective warranty policy is not only an obligation for the manufacturer or vendor, but it also enhances the willingness of customers to purchase from them in the future. To earn more customers and increase sales, manufacturers or vendors should be inclined to prolong the service life of their products as an effort to gain more customers. Nevertheless, manufacturers or vendors will not provide a boundless warranty in order to dominate the market, since the related warranty costs will eventually exceed the profits in the end. Therefore, it is a question of weighing the advantage of extending the warranty term in order to earn the trust of new customers against the investment. In addition, since deterioration depends on both time and usage, the deterioration estimation for durable products may be incorrect when considering only one factor. For such problems, a two-dimensional deterioration model is suitable, and the failure times are drawn from a non-homogeneous Poisson process (NHPP). Moreover, customers’ heterogeneity, manufacturers’ production capacity, and preventive maintenance services are also considered in this study. A mathematical model with the corresponding solution algorithm is proposed to assist manufacturers in making systematic decisions about pricing, production, and warranty. Finally, managerial implications are also provided for refining related decision-making.

On a parametric model for the mean number of system repairs with applications

In reliability engineering and other disciplines, there are many situations, in which one deals with the number of events in a time period that happen as an outcome of a stochastic process. Examples are the number of repairs of a system in an age-based block replacement and the number of repairs for a product sold under warranty in a specific period. In these circumstances, the mean number of failures (repair) plays a crucial role in assessing reliability characteristics and the optimal time of maintenance of the system. In this paper, we study a parametric function for the mean number of repairs of the system that covers a wide range of repair degrees, such as better than minimal repair, minimal repair and worse than minimal repair. Using the suggested model, we propose an approximation for the renewal function in the case that the repairs are complete. We also give applications of the proposed function in age-based block replacement and optimal warranty policy.

Generalized non-renewing replacement warranty policy and an age-based post-warranty maintenance strategy

Nowadays, to protect the interests of customers, quite a few warranted products are sold with some kinds of repair thresholds. For example, a mobile phone manufacturer may provide a replacement service if the phone sold still cannot work after several repair attempts or the cumulative repair time reaches 7 days or 1 month. Motivated by this observation, we study a non-renewing replacement warranty policy with a repair number threshold and a repair time threshold, in which the manufacturer has responsibility for replacing a product when the number of failures is beyond the repair number threshold or the cumulative repair time reaches the repair time threshold, whichever occurs first. In addition, an age-based post-warranty maintenance strategy is developed for the non-renewing replacement warranted product, which provides a lower cost rate than the existing ones. Based on the indicator function method and renewal process theory, we derive the product’s life cycle cost rate. Finally, considerable numerical experiments are carried out to show the influences of various parameters on the proposed maintenance strategy.

Genetic algorithm‐based price and warranty optimization in software systems

AbstractOwing to increasing competition, the marketing of commercial software products is a challenging task. Diverse marketing strategies are adopted to tap the huge market share. Among these, pricing and warranty are the most significant ones. The warranty policies organizations adopt usually have two dimensions: duration and effort spent during the warranty phase. In this paper, two variables are broadly taken: testing, which is an essential phase during software development, and warranty, which is a crucial component of after‐sales service. Here, we will formulate an optimization problem where returns and expenses will be influenced by price, testing resources spent, the duration for which testing is done, warranty duration and effort spent during warranty for the software product. The product sales are assumed to follow a Stochastic Bass model based on Non‐Homogeneous Poisson Process (NHPP). A free on‐site support warranty with an upper limit on duration and effort covers the 2D failure process. The numerical illustration is presented wherein profit is maximized by conjointly optimizing five variables, that is price, testing duration, testing effort, warranty duration and warranty effort. This study emphasizes on application of a popular soft computing, metaheuristic technique named genetic algorithm (GA) to solve an optimization problem for a software system. The solution to the Optimization problem is obtained using the GA tool in MATLAB. The results obtained have relevance in the industry for finding optimal values of significant variables before the release of newly developed software products to the ultimate client. The concept discussed in this paper has diverse applications in computer engineering, software and hardware industry.

Consumers' purchasing decisions of a dual-channel supply chain system under return and warranty policies

ABSTRACT With the rapid growth of internet technology, particularly during the COVID-19 pandemic, a major portion of consumers have intended to do online shopping. Also the use of eco-friendly products is essential in today's environment and human health. Thus this paper investigates the consumers' purchasing behaviour towards substitutable non-green and eco-friendly products in a dual-channel (offline and online channels) supply chain system. The manufacturer offers a novel combination of promotions such as a return policy in the online channel and a warranty policy in the offline channel depending on the position and situation of consumers. Here, the environmental burden is reduced by considering remanufacturing/refurbishing used products during the warranty period. Therefore, consumers' demand depends on price, eco-friendliness level, warranty and return agreements. The entire problem is modelled under centralised and decentralised decision-making scenarios. Finally, the profit maximisation problem is formulated and solved in the game theory framework. A series of sensitivity analyses of various parameters is conducted numerically to validate the problem. It is observed that, due to the instant return facility in the online channel, online demand is higher than the offline with a higher warranty period.

Warranty Cost Analysis for Multi-State Products Protected by Lemon Laws

The implementation of lemon laws in America has played an important role in improving the quality of after-sales service. Nowadays, many countries, such as China, Canada, Europe, Australia, Singapore, and South Korea, have adopted lemon laws in various industries to protect the interest of consumers. From the perspective of manufacturers, accurate estimation of the cost of the warranty service is of great importance in guiding product pricing, quality control, and design of warranty policies. According to the terms of different lemon laws, two warranty models considering the repair time and numbers for failures are proposed in this paper. Products under these models are multi-state, and Markov processes are used to model the degradation processes of products. In the first model, a product will be replaced by a new one if the time for a repair or the number of failures exceeds their respective thresholds over the warranty period. Under the second model, both catastrophic and minor failures are considered. A product will be replaced if one of the following three conditions is met over the warranty period: the time of one repair action (regardless of failure type) is longer than a time threshold; the number of minor failures is larger than a preset threshold; a catastrophic failure occurs. The expected warranty cost rates under the two proposed warranty models are derived under the assumption of renewable warranty terms. Numerical examples are given to illustrate the results obtained.