IDEAS home Printed from https://ideas.repec.org/a/spr/annopr/v244y2016i1d10.1007_s10479-014-1740-1.html
   My bibliography  Save this article

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

Author

Listed:
  • Minjae Park

    (Hongik University)

  • Ki Mun Jung

    (Kyungsung University)

  • Dong Ho Park

    (Hallym University)

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.

Suggested Citation

  • Minjae Park & Ki Mun Jung & Dong Ho Park, 2016. "Optimal warranty policies considering repair service and replacement service under the manufacturer’s perspective," Annals of Operations Research, Springer, vol. 244(1), pages 117-132, September.
  • Handle: RePEc:spr:annopr:v:244:y:2016:i:1:d:10.1007_s10479-014-1740-1
    DOI: 10.1007/s10479-014-1740-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10479-014-1740-1
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/s10479-014-1740-1?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. Hoang Pham (ed.), 2011. "Safety and Risk Modeling and Its Applications," Springer Series in Reliability Engineering, Springer, number 978-0-85729-470-8, March.
    2. Jung, M. & Bai, D.S., 2007. "Analysis of field data under two-dimensional warranty," Reliability Engineering and System Safety, Elsevier, vol. 92(2), pages 135-143.
    3. Diaz, Angel & Fu, Michael C., 1997. "Models for multi-echelon repairable item inventory systems with limited repair capacity," European Journal of Operational Research, Elsevier, vol. 97(3), pages 480-492, March.
    4. Shafiee, Mahmood & Chukova, Stefanka, 2013. "Maintenance models in warranty: A literature review," European Journal of Operational Research, Elsevier, vol. 229(3), pages 561-572.
    5. Minjae Park & Hoang Pham, 2011. "Maintenance and Warranty Concepts," Springer Series in Reliability Engineering, in: Hoang Pham (ed.), Safety and Risk Modeling and Its Applications, pages 101-122, Springer.
    6. Sleptchenko, A. & van der Heijden, M. C. & van Harten, A., 2002. "Effects of finite repair capacity in multi-echelon, multi-indenture service part supply systems," International Journal of Production Economics, Elsevier, vol. 79(3), pages 209-230, October.
    7. Kohlas, J. & Pasquier, J., 1981. "Optimization of spare parts for hierarchicall decomposable systems," European Journal of Operational Research, Elsevier, vol. 8(3), pages 294-300, November.
    8. A Sleptchenko & M C van der Heijden & A van Harten, 2003. "Trade-off between inventory and repair capacity in spare part networks," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 54(3), pages 263-272, March.
    9. S Chukova & Y Hayakawa & M. R. Johnston, 2007. "Optimal two-dimensional warranty repair strategy," Journal of Risk and Reliability, , vol. 221(4), pages 265-273, December.
    10. Jung, Ki Mun & Park, Minjae & Park, Dong Ho, 2010. "System maintenance cost dependent on life cycle under renewing warranty policy," Reliability Engineering and System Safety, Elsevier, vol. 95(7), pages 816-821.
    11. Tiemessen, H.G.H. & van Houtum, G.J., 2013. "Reducing costs of repairable inventory supply systems via dynamic scheduling," International Journal of Production Economics, Elsevier, vol. 143(2), pages 478-488.
    12. Kennedy, W. J. & Wayne Patterson, J. & Fredendall, Lawrence D., 2002. "An overview of recent literature on spare parts inventories," International Journal of Production Economics, Elsevier, vol. 76(2), pages 201-215, March.
    13. Jin, Tongdan & Tian, Yu, 2012. "Optimizing reliability and service parts logistics for a time-varying installed base," European Journal of Operational Research, Elsevier, vol. 218(1), pages 152-162.
    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. Lianmin Zhang & Lei Guan & Daniel Zhuoyu Long & Houcai Shen & Huajun Tang, 2023. "Who is better off by selling extended warranties in the supply chain: the manufacturer, the retailer, or both?," Annals of Operations Research, Springer, vol. 328(2), pages 1557-1583, September.
    2. Dai, Anshu & Wang, Xin & Li, Yu & Li, Ting & He, Shuguang, 2023. "Design of a performance-based warranty policy with replacement–repair strategy and cumulative cost threshold," International Journal of Production Economics, Elsevier, vol. 255(C).
    3. Liu, Peng & Wang, Guanjun & Su, Peng, 2021. "Optimal maintenance strategies for warranty products with limited repair time and limited repair number," Reliability Engineering and System Safety, Elsevier, vol. 210(C).

    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. Hu, Qiwei & Boylan, John E. & Chen, Huijing & Labib, Ashraf, 2018. "OR in spare parts management: A review," European Journal of Operational Research, Elsevier, vol. 266(2), pages 395-414.
    2. Turan, Hasan Hüseyin & Atmis, Mahir & Kosanoglu, Fuat & Elsawah, Sondoss & Ryan, Michael J., 2020. "A risk-averse simulation-based approach for a joint optimization of workforce capacity, spare part stocks and scheduling priorities in maintenance planning," Reliability Engineering and System Safety, Elsevier, vol. 204(C).
    3. Qin, Xuwei & Jiang, Zhong-Zhong & Sun, Minghe & Tang, Liang & Liu, Xiaoran, 2021. "Repairable spare parts provisioning for multiregional expanding fleets of equipment under performance-based contracting," Omega, Elsevier, vol. 102(C).
    4. de Smidt-Destombes, Karin S. & van der Heijden, Matthieu C. & van Harten, Aart, 2006. "On the interaction between maintenance, spare part inventories and repair capacity for a k-out-of-N system with wear-out," European Journal of Operational Research, Elsevier, vol. 174(1), pages 182-200, October.
    5. Driessen, M.A. & van Houtum, G.J. & Zijm, W.H.M. & Rustenburg, W.D., 2020. "Capacity assignment in repair shops with high material uncertainty," International Journal of Production Economics, Elsevier, vol. 221(C).
    6. Sleptchenko, A. & van der Heijden, M. C. & van Harten, A., 2005. "Using repair priorities to reduce stock investment in spare part networks," European Journal of Operational Research, Elsevier, vol. 163(3), pages 733-750, June.
    7. Rezapour, Shabnam & Allen, Janet K. & Mistree, Farrokh, 2016. "Reliable product-service supply chains for repairable products," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 95(C), pages 299-321.
    8. Shuai Zhang & Kai Huang & Yufei Yuan, 2021. "Spare Parts Inventory Management: A Literature Review," Sustainability, MDPI, vol. 13(5), pages 1-23, February.
    9. Costantino, Francesco & Di Gravio, Giulio & Patriarca, Riccardo & Petrella, Lea, 2018. "Spare parts management for irregular demand items," Omega, Elsevier, vol. 81(C), pages 57-66.
    10. Jin, Tongdan & Tian, Zhigang & Xie, Min, 2015. "A game-theoretical approach for optimizing maintenance, spares and service capacity in performance contracting," International Journal of Production Economics, Elsevier, vol. 161(C), pages 31-43.
    11. van der Heijden, M.C. & Alvarez, E.M. & Schutten, J.M.J., 2013. "Inventory reduction in spare part networks by selective throughput time reduction," International Journal of Production Economics, Elsevier, vol. 143(2), pages 509-517.
    12. Rappold, James A. & Van Roo, Ben D., 2009. "Designing multi-echelon service parts networks with finite repair capacity," European Journal of Operational Research, Elsevier, vol. 199(3), pages 781-792, December.
    13. Qin, Xuwei & Shao, Lusheng & Jiang, Zhong-Zhong, 2020. "Contract design for equipment after-sales service with business interruption insurance," European Journal of Operational Research, Elsevier, vol. 284(1), pages 176-187.
    14. 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.
    15. Wu, Shaomin, 2011. "Warranty claim analysis considering human factors," Reliability Engineering and System Safety, Elsevier, vol. 96(1), pages 131-138.
    16. Kennedy, W. J. & Wayne Patterson, J. & Fredendall, Lawrence D., 2002. "An overview of recent literature on spare parts inventories," International Journal of Production Economics, Elsevier, vol. 76(2), pages 201-215, March.
    17. Levner, Eugene & Perlman, Yael & Cheng, T.C.E. & Levner, Ilya, 2011. "A network approach to modeling the multi-echelon spare-part inventory system with backorders and interval-valued demand," International Journal of Production Economics, Elsevier, vol. 132(1), pages 43-51, July.
    18. Fritzsche, R., 2012. "Cost adjustment for single item pooling models using a dynamic failure rate: A calculation for the aircraft industry," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(6), pages 1065-1079.
    19. Ernesto Armando Pacheco-Velázquez & Manuel Robles-Cárdenas & Saúl Juárez Ordóñez & Abelardo Ernesto Damy Solís & Leopoldo Eduardo Cárdenas-Barrón, 2023. "A Heuristic Model for Spare Parts Stocking Based on Markov Chains," Mathematics, MDPI, vol. 11(16), pages 1-21, August.
    20. Parvaneh Samouei & Amir Kheirkhah & Parviz Fattahi, 2015. "A network approach modeling of multi-echelon spare-part inventory system with backorders and quantity discount," Annals of Operations Research, Springer, vol. 226(1), pages 551-563, March.

    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:spr:annopr:v:244:y:2016:i:1:d:10.1007_s10479-014-1740-1. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.