Post-Warranty Replacement Models for the Product under a Hybrid Warranty

Lijun Shang, Guojun Shang, Yongjun Du, Qingan Qiu, Li Yang and Qinglai Dong
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Lijun Shang: School of Quality Management and Standardization, Foshan University, Foshan 528000, China
Guojun Shang: Gao Tou Yao Coal Mine, North United Power Corporation, Ordos 014323, China
Yongjun Du: School of Economics and Management, Lanzhou University of Technology, Lanzhou 730050, China
Qingan Qiu: School of Management & Economics, Beijing Institute of Technology, Beijing 100081, China
Li Yang: School of Reliability and Systems Engineering, Beihang University, Beijing 100191, China
Qinglai Dong: School of Mathematics & Computer Science, Yan’an University, Yan’an 716000, China

Mathematics, 2022, vol. 10, issue 10, 1-18

Abstract: In this article, by considering both a limited number of failure replacements and a limited number of random working cycles as warranty terms, a hybrid warranty (HW) is designed from the manufacturer’s point of view to warrant the product that does successive projects at random working cycles. The warranty cost produced by HW is derived and analyzed. By defining that HW warrants the product, two types of post-warranty replacement models are investigated from the consumer’s point of view to ensure the reliability of the product through HW, i.e., customized post-warranty replacement and uniform post-warranty replacement. Depreciation expense is integrated into each post-warranty replacement. The expected cost rate model is presented for each post-warranty replacement and some special cases are obtained by setting parameters in the expected cost rate. Finally, sensitivities on both HW and post-warranty replacements are analyzed in numerical experiments. It is shown that when a limited number of failure replacements or/and a limited number of random working cycles are introduced to a warranty, the warranty cost can be reduced; and the performance of the uniform post-warranty replacement is superior to the customized post-warranty replacement.

Keywords: hybrid warranty; random working cycle; post-warranty replacement; depreciation expense; cost rate (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2022
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