OPTIMAL DISCRETE-TIME PERIODIC REPLACEMENT POLICY FOR REPAIRABLE PRODUCTS UNDER FREE MINIMAL REPAIR WARRANTY

Fu-Min Chang () and Yu-Hung Chien ()
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Fu-Min Chang: Department of Finance, Chaoyang University of Technology, No. 168, Jifong E. Rd., Wufong Township, Taichung County, 41349, Taiwan
Yu-Hung Chien: Department of Applied Statistics, National Taichung University of Science and Technology, No. 129, Sec. 3, San-min Rd., North District, Taichung City 40401, Taiwan

Asia-Pacific Journal of Operational Research (APJOR), 2012, vol. 29, issue 03, 1-14

Abstract: This paper presents the effects of a free minimal repair warranty (FMRW) on the periodic replacement policy under discrete operating circumstance. For the discrete-time periodic replacement policy, a product is preventively replaced at pre-specified operation cycles N, 2N, 3N, … (N = 1, 2, …). When the product fails, a minimal repair is performed at the time of failure and the failure rate is not disturbed by each repair. From the customer's perspective, the cost models are developed for both a warranted and a nonwarranted product, and the corresponding optimal periodic replacement policies are derived such that the long-run expected cost rates are minimized. Under the assumption of the discrete time increasing failure rate (IFR), the existence and uniqueness of the optimal N* are shown, and the impacts of a FMRW on the optimal replacement policies are investigated analytically. We found that the optimal N* for a warranted product should be adjusted toward the end of the warranty period.

Keywords: Periodic replacement; free minimal repair warranty; long-run expected cost rate; increasing failure rate; discrete failure distribution (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1142/S0217595912400209

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