IDEAS home Printed from https://ideas.repec.org/a/eee/reensy/v167y2017icp452-463.html
   My bibliography  Save this article

On reliability improvement program for second-hand products sold with a two-dimensional warranty

Author

Listed:
  • Wang, Yukun
  • Liu, Yiliu
  • Liu, Zixian
  • Li, Xiaopeng

Abstract

The growing market for second-hand products facilitates the acceptance of warranty provided by dealers to promote sales and provide assurance for customers. Offering warranty results in additional cost due to warranty claims servicing. Such cost can be reduced through upgrade and preventive maintenance (PM) that improve the reliability of the product. Reliability improvement is worthwhile only if the cost incurred is less than the reduction in the warranty cost. For repairable second-hand products sold with a two-dimensional warranty, this paper investigates the worthiness of reliability improvement from the dealer’s viewpoint. A new modeling approach is proposed and studied, allowing the same product to have distinct degradation processes due to customer usage intensity variation. The effects of customer usage heterogeneity, upgrade and PM actions on the product reliability and the corresponding expected cost to the dealer are characterized. Optimal reliability program including the upgrade degree and PM policy is derived so that the expected total cost of the second-hand product to the dealer can be minimized. Numerical examples are utilized to illustrate the applicability of the proposed model. In addition, some practical implications from a sensitive analysis regarding the important parameters are elaborated.

Suggested Citation

  • Wang, Yukun & Liu, Yiliu & Liu, Zixian & Li, Xiaopeng, 2017. "On reliability improvement program for second-hand products sold with a two-dimensional warranty," Reliability Engineering and System Safety, Elsevier, vol. 167(C), pages 452-463.
    • Handle: RePEc:eee:reensy:v:167:y:2017:i:c:p:452-463
    DOI: 10.1016/j.ress.2017.06.029
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0951832016308948
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ress.2017.06.029?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Huang, Yeu-Shiang & Huang, Chao-Da & Ho, Jyh-Wen, 2017. "A customized two-dimensional extended warranty with preventive maintenance," European Journal of Operational Research, Elsevier, vol. 257(3), pages 971-978.
    2. Su, Chun & Wang, Xiaolin, 2016. "A two-stage preventive maintenance optimization model incorporating two-dimensional extended warranty," Reliability Engineering and System Safety, Elsevier, vol. 155(C), pages 169-178.
    3. Y. Sarada & M. Mubashirunnissa, 2011. "Warranty cost analysis for second-hand products using bivariate approach," International Journal of Operational Research, Inderscience Enterprises Ltd, vol. 12(1), pages 34-55.
    4. Murthy, D. N. P. & Djamaludin, I., 2002. "New product warranty: A literature review," International Journal of Production Economics, Elsevier, vol. 79(3), pages 231-260, October.
    5. Wang, Jinting & Zhou, Zhuang & Peng, Hao, 2017. "Flexible decision models for a two-dimensional warranty policy with periodic preventive maintenance," Reliability Engineering and System Safety, Elsevier, vol. 162(C), pages 14-27.
    6. Chun Su & Xiaolin Wang, 2014. "Optimizing upgrade level and preventive maintenance policy for second-hand products sold with warranty," Journal of Risk and Reliability, , vol. 228(5), pages 518-528, October.
    7. Shafiee, Mahmood & Finkelstein, Maxim & Chukova, Stefanka, 2011. "On optimal upgrade level for used products under given cost structures," Reliability Engineering and System Safety, Elsevier, vol. 96(2), pages 286-291.
    8. Mahmood Shafiee & Maxim Finkelstein & Ming Zuo, 2013. "Optimal burn-in and preventive maintenance warranty strategies with time-dependent maintenance costs," IISE Transactions, Taylor & Francis Journals, vol. 45(9), pages 1024-1033.
    9. Cha, Ji Hwan & Finkelstein, Maxim, 2016. "On information-based warranty policy for repairable products from heterogeneous populationAuthor-Name: Lee, Hyunju," European Journal of Operational Research, Elsevier, vol. 253(1), pages 204-215.
    10. Mohamed Noomane Darghouth & Anis Chelbi & Daoud Ait-kadi, 2017. "Investigating reliability improvement of second-hand production equipment considering warranty and preventive maintenance strategies," International Journal of Production Research, Taylor & Francis Journals, vol. 55(16), pages 4643-4661, August.
    11. Jye Lu & Gouri Bhattacharyya, 1990. "Some new constructions of bivariate Weibull models," Annals of the Institute of Statistical Mathematics, Springer;The Institute of Statistical Mathematics, vol. 42(3), pages 543-559, September.
    12. Richard Barlow & Larry Hunter, 1960. "Optimum Preventive Maintenance Policies," Operations Research, INFORMS, vol. 8(1), pages 90-100, February.
    13. Finkelstein, Maxim, 2007. "On statistical and information-based virtual age of degrading systems," Reliability Engineering and System Safety, Elsevier, vol. 92(5), pages 676-681.
    14. Shafiee, Mahmood & Chukova, Stefanka, 2013. "Maintenance models in warranty: A literature review," European Journal of Operational Research, Elsevier, vol. 229(3), pages 561-572.
    15. Chun Su & Xiaolin Wang, 2016. "Modeling flexible two-dimensional warranty contracts for used products considering reliability improvement actions," Journal of Risk and Reliability, , vol. 230(2), pages 237-247, April.
    16. Finkelstein, Maxim, 2009. "Virtual age of non-repairable objects," Reliability Engineering and System Safety, Elsevier, vol. 94(2), pages 666-669.
    17. Wang, Yukun & Liu, Zixian & Liu, Yiliu, 2015. "Optimal preventive maintenance strategy for repairable items under two-dimensional warranty," Reliability Engineering and System Safety, Elsevier, vol. 142(C), pages 326-333.
    18. Jack, N. & Iskandar, B.P. & Murthy, D.N.P., 2009. "A repair–replace strategy based on usage rate for items sold with a two-dimensional warranty," Reliability Engineering and System Safety, Elsevier, vol. 94(2), pages 611-617.
    19. Lo, Hui-Chiung & Yu, Rouh-Yun, 2013. "A study of quality management strategy for reused products," Reliability Engineering and System Safety, Elsevier, vol. 119(C), pages 172-177.
    20. Darghouth, M.N. & Ait-kadi, D. & Chelbi, A., 2017. "Joint optimization of design, warranty and price for products sold with maintenance service contracts," Reliability Engineering and System Safety, Elsevier, vol. 165(C), pages 197-208.
    21. Mahmood Shafiee & Stefanka Chukova & Won Yun & Seyed Niaki, 2011. "On the investment in a reliability improvement program for warranted second-hand items," IISE Transactions, Taylor & Francis Journals, vol. 43(7), pages 525-534.
    22. D. N. P. Murthy & B. P. Iskandar & R. J. Wilson, 1995. "Two-Dimensional Failure-Free Warranty Policies: Two-Dimensional Point Process Models," Operations Research, INFORMS, vol. 43(2), pages 356-366, April.
    23. Murthy, D.N.P. & Rausand, M. & Virtanen, S., 2009. "Investment in new product reliability," Reliability Engineering and System Safety, Elsevier, vol. 94(10), pages 1593-1600.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Peng, Shizhe & Jiang, Wei & Huang, Wenpo & Luo, Qinglin, 2024. "The impact of gamma usage processes on preventive maintenance policies under two-dimensional warranty," Reliability Engineering and System Safety, Elsevier, vol. 242(C).
    2. Santos, Augusto César de Jesus & Cavalcante, Cristiano Alexandre Virgínio & Wu, Shaomin, 2023. "Maintenance policies and models: A bibliometric and literature review of strategies for reuse and remanufacturing," Reliability Engineering and System Safety, Elsevier, vol. 231(C).
    3. Zhu, Xiaoyan & Jiao, Can & Yuan, Tao, 2019. "Optimal decisions on product reliability, sales and promotion under nonrenewable warranties," Reliability Engineering and System Safety, Elsevier, vol. 192(C).
    4. Lijun Shang & Guojun Shang & Qingan Qiu, 2022. "A Bivariate Post-Warranty Maintenance Model for the Product under a 2D Warranty," Mathematics, MDPI, vol. 10(12), pages 1-18, June.
    5. Fang, Chih-Chiang, 2020. "Optimal price and warranty decision for durable products in a competitive duopoly market," Reliability Engineering and System Safety, Elsevier, vol. 203(C).
    6. Santos, Augusto César de Jesus & Cavalcante, Cristiano Alexandre Virginio & Ren, Junru & Wu, Shaomin, 2023. "A novel delay time modelling method for incorporating reuse actions in three-state single-component systems," Reliability Engineering and System Safety, Elsevier, vol. 234(C).
    7. Xiaolin Wang & Wei Xie, 2018. "Two-dimensional warranty: A literature review," Journal of Risk and Reliability, , vol. 232(3), pages 284-307, June.
    8. Zheng, Rui & Zhou, Yifan, 2021. "Comparison of three preventive maintenance warranty policies for products deteriorating with age and a time-varying covariate," Reliability Engineering and System Safety, Elsevier, vol. 213(C).
    9. Wang, Guodong & Shao, Mengying & Lv, Shanshan & Kong, Xiangfen & He, Zhen & Vining, Geoff, 2022. "Process parameter optimization for lifetime improvement experiments considering warranty and customer satisfaction," Reliability Engineering and System Safety, Elsevier, vol. 221(C).
    10. Anshu Dai & Guanzhou Wei & Zhaomin Zhang & Shuguang He, 2020. "Design of a flexible preventive maintenance strategy for two-dimensional warranted products," Journal of Risk and Reliability, , vol. 234(1), pages 74-87, February.
    11. Wang, Dongfan & He, Zhen & He, Shuguang & Zhang, Zhaomin & Zhang, Yiwen, 2021. "Dynamic pricing of two-dimensional extended warranty considering the impacts of product price fluctuations and repair learning," Reliability Engineering and System Safety, Elsevier, vol. 210(C).
    12. Wang, Xiaolin & Li, Lishuai & Xie, Min, 2020. "An unpunctual preventive maintenance policy under two-dimensional warranty," European Journal of Operational Research, Elsevier, vol. 282(1), pages 304-318.
    13. Dai, Anshu & Wei, Guanzhou & Wang, Dongfan & He, Zhen & He, Shuguang, 2021. "The opportunity study of PM strategy for second-hand products sold with a two-dimensional warranty," Reliability Engineering and System Safety, Elsevier, vol. 214(C).
    14. Esmat Baghdadi & Mahmood Shafiee & Babakalli Alkali, 2022. "Upgrading Strategy, Warranty Policy and Pricing Decisions for Remanufactured Products Sold with Two-Dimensional Warranty," Sustainability, MDPI, vol. 14(12), pages 1-15, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Xiaolin Wang & Wei Xie, 2018. "Two-dimensional warranty: A literature review," Journal of Risk and Reliability, , vol. 232(3), pages 284-307, June.
    2. Yukun Wang & Yiliu Liu & Aibo Zhang, 2019. "Preventive maintenance optimization for repairable products considering two-dimensional warranty and customer satisfaction," Journal of Risk and Reliability, , vol. 233(4), pages 553-566, August.
    3. Wang, Xiaolin & Li, Lishuai & Xie, Min, 2020. "An unpunctual preventive maintenance policy under two-dimensional warranty," European Journal of Operational Research, Elsevier, vol. 282(1), pages 304-318.
    4. Dai, Anshu & Wei, Guanzhou & Wang, Dongfan & He, Zhen & He, Shuguang, 2021. "The opportunity study of PM strategy for second-hand products sold with a two-dimensional warranty," Reliability Engineering and System Safety, Elsevier, vol. 214(C).
    5. Peng, Shizhe & Jiang, Wei & Wei, Lai & Wang, Xiao-Lin, 2022. "A new cost-sharing preventive maintenance program under two-dimensional warranty," International Journal of Production Economics, Elsevier, vol. 254(C).
    6. Wang, Yukun & Liu, Yiliu & Li, Xiaopeng & Chen, Junyan, 2019. "Multi-phase reliability growth test planning for repairable products sold with a two-dimensional warranty," Reliability Engineering and System Safety, Elsevier, vol. 189(C), pages 315-326.
    7. Chun Su & Xiaolin Wang, 2016. "Modeling flexible two-dimensional warranty contracts for used products considering reliability improvement actions," Journal of Risk and Reliability, , vol. 230(2), pages 237-247, April.
    8. Santos, Augusto César de Jesus & Cavalcante, Cristiano Alexandre Virgínio & Wu, Shaomin, 2023. "Maintenance policies and models: A bibliometric and literature review of strategies for reuse and remanufacturing," Reliability Engineering and System Safety, Elsevier, vol. 231(C).
    9. Zhu, Ying & Xia, Tangbin & Chen, Zhen & Pan, Ershun & Xi, Lifeng, 2022. "Optimal maintenance service strategy for OEM entering competitive MRO market under opposite patterns," Reliability Engineering and System Safety, Elsevier, vol. 217(C).
    10. Lu, Zhen & Shang, Jennifer, 2019. "Warranty mechanism for pre-owned tech products: Collaboration between E-tailers and online warranty provider," International Journal of Production Economics, Elsevier, vol. 211(C), pages 119-131.
    11. Peng, Shizhe & Jiang, Wei & Huang, Wenpo & Luo, Qinglin, 2024. "The impact of gamma usage processes on preventive maintenance policies under two-dimensional warranty," Reliability Engineering and System Safety, Elsevier, vol. 242(C).
    12. Mohamed Noomane Darghouth & Anis Chelbi & Daoud Ait-kadi, 2017. "Investigating reliability improvement of second-hand production equipment considering warranty and preventive maintenance strategies," International Journal of Production Research, Taylor & Francis Journals, vol. 55(16), pages 4643-4661, August.
    13. Chun Su & Longfei Cheng, 2019. "Two-dimensional preventive maintenance optimum for equipment sold with availability-based warranty," Journal of Risk and Reliability, , vol. 233(4), pages 648-657, August.
    14. Anshu Dai & Guanzhou Wei & Zhaomin Zhang & Shuguang He, 2020. "Design of a flexible preventive maintenance strategy for two-dimensional warranted products," Journal of Risk and Reliability, , vol. 234(1), pages 74-87, February.
    15. Lijun Shang & Guojun Shang & Qingan Qiu, 2022. "A Bivariate Post-Warranty Maintenance Model for the Product under a 2D Warranty," Mathematics, MDPI, vol. 10(12), pages 1-18, June.
    16. Wu, Shaomin, 2024. "A copula-based approach to modelling the failure process of items under two-dimensional warranty and applications," European Journal of Operational Research, Elsevier, vol. 314(3), pages 854-866.
    17. Wang, Jinting & Zhou, Zhuang & Peng, Hao, 2017. "Flexible decision models for a two-dimensional warranty policy with periodic preventive maintenance," Reliability Engineering and System Safety, Elsevier, vol. 162(C), pages 14-27.
    18. Hooti, Fatemeh & Ahmadi, Jafar & Longobardi, Maria, 2020. "Optimal extended warranty length with limited number of repairs in the warranty period," Reliability Engineering and System Safety, Elsevier, vol. 203(C).
    19. Park, Minjae & Jung, Ki Mun & Park, Dong Ho, 2018. "Optimization of periodic preventive maintenance policy following the expiration of two-dimensional warranty," Reliability Engineering and System Safety, Elsevier, vol. 170(C), pages 1-9.
    20. Shafiee, Mahmood & Finkelstein, Maxim & Chukova, Stefanka, 2011. "On optimal upgrade level for used products under given cost structures," Reliability Engineering and System Safety, Elsevier, vol. 96(2), pages 286-291.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:reensy:v:167:y:2017:i:c:p:452-463. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/reliability-engineering-and-system-safety .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.