 A new cost-sharing preventive maintenance program under two-dimensional warrantyShizhe Peng, Wei Jiang, Lai Wei and Xiao-Lin Wang International Journal of Production Economics, 2022, vol. 254, issue C Abstract: In this paper, we present a new cost-sharing preventive maintenance (PM) program for a product protected by a two-dimensional warranty. The product is preventively maintained by its manufacturer in the warranty period and by a customer in the post-warranty period. To better coordinate their decisions, the cost of PM during the warranty period is borne jointly by both parties based on a fixed ratio. We propose a new way of designing such a cost-sharing PM program by using the customer’s expected post-warranty cost. We find a failure intensity threshold that determines whether the customer should carry out PM at the beginning of the post-warranty period. It is shown that cost sharing can reduce the failure intensity at this point, which in turn can reduce the customer’s expected total cost. Given a specific usage rate of the product, we then derive the optimal cost-sharing ratio from the customer’s perspective. In the numerical study, we examine the effect of usage rate on the optimal cost-sharing ratio as well as the benefits gained from cost sharing. Keywords: Cost sharing; Preventive maintenance; Two-dimensional warranty (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:254:y:2022:i:c:s0925527322001694 DOI: 10.1016/j.ijpe.2022.108580 Access Statistics for this article International Journal of Production Economics is currently edited by Stefan Minner More articles in International Journal of Production Economics from Elsevier |
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