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Optimal age for preventive replacement under a combined fully renewable free replacement with a pro-rata warranty

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  • Chien, Yu-Hung

Abstract

This paper focuses on an age-replacement policy for products under a new warranty strategy, which combines a fully renewable free replacement with a pro-rata warranty policy (called fully renewable FRW/PRW policy). For this combined warranty strategy, whenever a product fails within the warranty period, it is replaced by a new one and a new warranty is issued. Meanwhile, if the failure occurs during the first time interval (i.e., the free-replacement warranty (FRW) interval), replacement is made at no cost to the buyer; however, if the failure occurs during the second time interval (i.e., the pro-rata warranty (PRW) interval), replacement is made at a pro-rata cost to the buyer. Dividing the replacement age into three separate periods: within FRW, during PRW, and post-warranty. Then, given that the replacement age is in a certain interval, the cost model from the user/buyer perspective is developed, and the corresponding local optimal replacement age is derived such that the long run expected cost rate is minimized. Afterward, the global optimal replacement age is determined. Structural properties of these optimal policies are obtained and presented, and special cases of the model are discussed. Finally, a numerical example is given for illustration.

Suggested Citation

  • Chien, Yu-Hung, 2010. "Optimal age for preventive replacement under a combined fully renewable free replacement with a pro-rata warranty," International Journal of Production Economics, Elsevier, vol. 124(1), pages 198-205, March.
    • Handle: RePEc:eee:proeco:v:124:y:2010:i:1:p:198-205
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    References listed on IDEAS

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    1. Sheu, Shey-Huei & Chien, Yu-Hung, 2005. "Optimal burn-in time to minimize the cost for general repairable products sold under warranty," European Journal of Operational Research, Elsevier, vol. 163(2), pages 445-461, June.
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    Cited by:

    1. Liu, Gia-Shie, 2011. "Dynamic group instantaneous replacement policies for unreliable Markovian service systems," International Journal of Production Economics, Elsevier, vol. 130(2), pages 203-217, April.
    2. Bouguerra, Soumaya & Chelbi, Anis & Rezg, Nidhal, 2012. "A decision model for adopting an extended warranty under different maintenance policies," International Journal of Production Economics, Elsevier, vol. 135(2), pages 840-849.
    3. Shafiee, Mahmood & Chukova, Stefanka, 2013. "Maintenance models in warranty: A literature review," European Journal of Operational Research, Elsevier, vol. 229(3), pages 561-572.
    4. Wu, Shaomin & Longhurst, Phil, 2011. "Optimising age-replacement and extended non-renewing warranty policies in lifecycle costing," International Journal of Production Economics, Elsevier, vol. 130(2), pages 262-267, April.
    5. Zhu, Qinghua & Li, Helong & Zhao, Senlin & Lun, Venus, 2016. "Redesign of service modes for remanufactured products and its financial benefits," International Journal of Production Economics, Elsevier, vol. 171(P2), pages 231-240.
    6. Gia-Shie Liu, 2019. "A Group Replacement Decision Support System Based on Internet of Things," Mathematics, MDPI, vol. 7(9), pages 1-23, September.
    7. Richardson, Steven & Kefford, Adrian & Hodkiewicz, Melinda, 2013. "Optimised asset replacement strategy in the presence of lead time uncertainty," International Journal of Production Economics, Elsevier, vol. 141(2), pages 659-667.
    8. Wen Liang Chang, 2015. "Optimal single-replacement for repairable products with different failure rate under a finite planning horizon," International Journal of Systems Science, Taylor & Francis Journals, vol. 46(6), pages 1003-1009, April.
    9. Chien, Yu-Hung, 2012. "The effects of a free-repair warranty on the discrete-time periodic replacement policy," International Journal of Production Economics, Elsevier, vol. 135(2), pages 832-839.
    10. M Shafiee & M Finkelstein & S Chukova, 2011. "Burn-in and imperfect preventive maintenance strategies for warranted products," Journal of Risk and Reliability, , vol. 225(2), pages 211-218, June.
    11. Safaei, Fatemeh & Taghipour, Sharareh, 2022. "Optimal preventive maintenance for repairable products with three types of failures sold under a renewable hybrid FRW/PRW policy," Reliability Engineering and System Safety, Elsevier, vol. 223(C).
    12. Nan Zhang & Mitra Fouladirad & Anne Barros, 2018. "Warranty analysis of a two-component system with type I stochastic dependence," Journal of Risk and Reliability, , vol. 232(3), pages 274-283, June.
    13. Park, Minjae & Mun Jung, Ki & Park, Dong Ho, 2013. "Optimal post-warranty maintenance policy with repair time threshold for minimal repair," Reliability Engineering and System Safety, Elsevier, vol. 111(C), pages 147-153.

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