On reliability improvement program for second-hand products sold with a two-dimensional warranty
Zixian Liu and
Reliability Engineering and System Safety, 2017, vol. 167, issue C, 452-463
The growing market for second-hand products facilitates the acceptance of warranty provided by dealers to promote sales and provide assurance for customers. Offering warranty results in additional cost due to warranty claims servicing. Such cost can be reduced through upgrade and preventive maintenance (PM) that improve the reliability of the product. Reliability improvement is worthwhile only if the cost incurred is less than the reduction in the warranty cost. For repairable second-hand products sold with a two-dimensional warranty, this paper investigates the worthiness of reliability improvement from the dealerâ€™s viewpoint. A new modeling approach is proposed and studied, allowing the same product to have distinct degradation processes due to customer usage intensity variation. The effects of customer usage heterogeneity, upgrade and PM actions on the product reliability and the corresponding expected cost to the dealer are characterized. Optimal reliability program including the upgrade degree and PM policy is derived so that the expected total cost of the second-hand product to the dealer can be minimized. Numerical examples are utilized to illustrate the applicability of the proposed model. In addition, some practical implications from a sensitive analysis regarding the important parameters are elaborated.
Keywords: Second-hand product; Two-dimensional warranty; Reliability improvement; Upgrade; Preventive maintenance (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:reensy:v:167:y:2017:i:c:p:452-463
Access Statistics for this article
Reliability Engineering and System Safety is currently edited by Carlos Guedes Soares
More articles in Reliability Engineering and System Safety from Elsevier
Series data maintained by Dana Niculescu ().