Optimal warranty policies considering repair service and replacement service under the manufacturer’s perspective

Minjae Park, Ki Mun Jung and Dong Ho Park ()
Additional contact information
Minjae Park: Hongik University
Ki Mun Jung: Kyungsung University
Dong Ho Park: Hallym University

Annals of Operations Research, 2016, vol. 244, issue 1, No 8, 117-132

Abstract: Abstract In this paper, under the manufacturer’s point of view, a warranty cost model is proposed in consideration of both repair service and replacement service simultaneously upon the system failure to find the optimized warranty period in terms of an expected cost rate during the warranty cycle. If a failed system can’t be repaired by the threshold warranty servicing time in the warranty service center, the replacement service is provided for the failed system instead of continuing to provide the repair service. Under such circumstance, new warranty cost models are developed and the renewable warranty policy is investigated for free and pro-rata two-dimensional warranty dependent on both failure time and warranty servicing time. From the manufacturer’s point of view, the warranty period is newly defined starting from the system’s purchasing time and ending at the expiration time of the warranty. This paper determines the optimal warranty period by applying Nelder–Mead downhill simplex method to minimize the expected cost rate during the warranty period. The real application is discussed adopting the proposed approach based on the actual field data and numerical examples are presented to exemplify the applicability of the methodologies derived in this paper.

Keywords: Cost model; Failure time; Field data; Manufacturer’s perspective; Nelder–Mead method; Warranty servicing time (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://link.springer.com/10.1007/s10479-014-1740-1 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:annopr:v:244:y:2016:i:1:d:10.1007_s10479-014-1740-1

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10479

DOI: 10.1007/s10479-014-1740-1

Access Statistics for this article

Annals of Operations Research is currently edited by Endre Boros

More articles in Annals of Operations Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().