On optimal upgrade strategy for second-hand multi-component systems sold with warranty

Xiaolin Wang, Min Xie and Lishuai Li

International Journal of Production Research, 2019, vol. 57, issue 3, 847-864

Abstract: Reliability improvement strategies such as upgrade, reconditioning and remanufacturing have been extensively adopted by dealers of second-hand systems to improve the system reliability and reduce the warranty servicing cost. However, most existing studies on this topic do not consider the multi-component structures of complex second-hand systems, and either treat them as black-box systems by ignoring their internal structures or simply deal with individual components. In this paper, a new upgrade model is developed for complex second-hand systems sold with a non-renewing free repair/replacement warranty, by explicitly considering their multi-component configurations. Two types of components, i.e. repairable and non-repairable components, are taken into account. During the upgrade process, non-repairable components can be upgraded only by replacement (if necessary), while repairable ones may be imperfectly upgraded with various degrees. The main objective of the dealer is to determine which components to upgrade and the corresponding upgrade degrees, to minimise the total expected servicing cost. In view of the problem structure, a marginal analysis based algorithm is presented. It is shown that the proposed upgrade strategy contains the ‘no upgrade’ strategy and the ‘component-level perfect upgrade/replacement’ strategy as special cases, and outperforms them. Finally, several extensions of the proposed upgrade model are discussed.

Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://hdl.handle.net/10.1080/00207543.2018.1488087 (text/html)
Access to full text is restricted to subscribers.

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:taf:tprsxx:v:57:y:2019:i:3:p:847-864

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/TPRS20

DOI: 10.1080/00207543.2018.1488087

Access Statistics for this article

International Journal of Production Research is currently edited by Professor A. Dolgui

More articles in International Journal of Production Research from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().