Modeling and analysis of a warranty policy using new and reconditioned parts

Navin Chari, Claver Diallo, Uday Venkatadri and Abdelhakim Khatab

Applied Stochastic Models in Business and Industry, 2016, vol. 32, issue 4, 539-553

Abstract: Remanufacturing processes such as refurbishing and reconditioning can extend the life of a product returned from the field. This provides financial opportunities and allows manufacturers to engage in sustainable practices. However, the inability to access a sufficient quantity of reconditioned components from end‐of‐life products can force the concurrent utilization of new components. This paper deals with the determination of an optimal warranty policy where a mixture of new and reconditioned components are used to carry out replacements upon failure for products under warranty. A mathematical optimization model is developed to maximize the manufacturer's expected total profit based on four decision variables: the warranty length, the sale price, the age of reconditioned components, and the proportion of reconditioned components to be used. A numerical procedure is used to compute the optimal solution. Numerical results are provided and discussed to demonstrate the validity and the added value of the proposed approach. Copyright © 2016 John Wiley & Sons, Ltd.

Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://doi.org/10.1002/asmb.2178

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:apsmbi:v:32:y:2016:i:4:p:539-553

Access Statistics for this article

More articles in Applied Stochastic Models in Business and Industry from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery ().