IDEAS home Printed from https://ideas.repec.org/a/spr/opsear/v60y2023i2d10.1007_s12597-023-00628-1.html
   My bibliography  Save this article

Optimal production run in an imperfect production process with maintenance under warranty and product insurance

Author

Listed:
  • Prasanta Kumar Ghosh

    (National Institute of Technology
    Y.S. Palpara Mahavidyalaya)

  • Amalesh Kumar Manna

    (The University of Burdwan
    University of Engineering & Management)

  • Jayanta Kumar Dey

    (Mahishadal Raj College)

  • Samarjit Kar

    (National Institute of Technology)

Abstract

In the business world, product warranty and insurance plays an important role by increasing the demand of the product to maximizing the average profit or minimizing the average cost in a manufacturing system. Also, the customers’ demand depends on several factors, viz. quality, selling price, payment strategies, warranty and insurance of the product. This paper develops an imperfect production inventory model with preventive machine maintenance, rework, warranty and insurance coverage on the accidentally damaged part(s) of the product. The concerned production system can randomly shift from an in-control state to an out-of-control state at any time during a production run, and the time elapsed while the production process stays in the in-control state is assumed to be exponentially distributed. The rates of producing reworkable defective items in the in-control state and out-control states are different. The demand rate of the customers is considered as the product’s selling price and warranty period dependent. To attract customers and increase the demand for the product, the manufacturer offers an insurance policy on the damageable part(s) of the product within the warranty period. The main aim of this study is to find the optimal production time, selling price for the different warranty periods of the product, which maximizes the profit per unit business period. To examine the validity of the proposed model, two numerical examples are considered and solved with the help of MATHEMATICA software. Finally, the effects of warranty and insurance policies on the products are analyzed, based on the numerical examples.

Suggested Citation

  • Prasanta Kumar Ghosh & Amalesh Kumar Manna & Jayanta Kumar Dey & Samarjit Kar, 2023. "Optimal production run in an imperfect production process with maintenance under warranty and product insurance," OPSEARCH, Springer;Operational Research Society of India, vol. 60(2), pages 720-752, June.
    • Handle: RePEc:spr:opsear:v:60:y:2023:i:2:d:10.1007_s12597-023-00628-1
    DOI: 10.1007/s12597-023-00628-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s12597-023-00628-1
    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/s12597-023-00628-1?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. Goyal, Suresh Kumar & Cardenas-Barron, Leopoldo Eduardo, 2002. "Note on: Economic production quantity model for items with imperfect quality - a practical approach," International Journal of Production Economics, Elsevier, vol. 77(1), pages 85-87, May.
    2. Rubayet Karim & Koichi Nakade, 2021. "Stochastic analysis of an imperfect production-inventory system with consideration of random machine breakdown, rework, inspection, and environmental emissions," International Journal of Industrial and Systems Engineering, Inderscience Enterprises Ltd, vol. 39(1), pages 71-122.
    3. Ashoke Kumar Bera & Dipak Kumar Jana, 2017. "Multi-item imperfect production inventory model in Bi-fuzzy environments," OPSEARCH, Springer;Operational Research Society of India, vol. 54(2), pages 260-282, June.
    4. Giri, B. C. & Yun, W. Y., 2005. "Optimal lot sizing for an unreliable production system under partial backlogging and at most two failures in a production cycle," International Journal of Production Economics, Elsevier, vol. 95(2), pages 229-243, February.
    5. Anushri Maji & Asoke Kumar Bhunia & Shyamal Kumar Mondal, 2022. "A production-reliability-inventory model for a series-parallel system with mixed strategy considering shortage, warranty period, credit period in crisp and stochastic sense," OPSEARCH, Springer;Operational Research Society of India, vol. 59(3), pages 862-907, September.
    6. Harry Groenevelt & Liliane Pintelon & Abraham Seidmann, 1992. "Production Lot Sizing with Machine Breakdowns," Management Science, INFORMS, vol. 38(1), pages 104-123, January.
    7. Chiu, Singa Wang & Wang, Shan-Ling & Chiu, Yuan-Shyi Peter, 2007. "Determining the optimal run time for EPQ model with scrap, rework, and stochastic breakdowns," European Journal of Operational Research, Elsevier, vol. 180(2), pages 664-676, July.
    8. Wu, Chin-Chun & Lin, Pei-Chun & Chou, Chao-Yu, 2006. "Determination of price and warranty length for a normal lifetime distributed product," International Journal of Production Economics, Elsevier, vol. 102(1), pages 95-107, July.
    9. Yun, Won Young & Murthy, D.N.P. & Jack, N., 2008. "Warranty servicing with imperfect repair," International Journal of Production Economics, Elsevier, vol. 111(1), pages 159-169, January.
    10. Harun Öztürk, 2021. "Optimal production run time for an imperfect production inventory system with rework, random breakdowns and inspection costs," Operational Research, Springer, vol. 21(1), pages 167-204, March.
    11. Chakraborty, Tulika & Giri, B.C. & Chaudhuri, K.S., 2009. "Production lot sizing with process deterioration and machine breakdown under inspection schedule," Omega, Elsevier, vol. 37(2), pages 257-271, April.
    12. Yeo, Wee Meng & Yuan, Xue-Ming, 2009. "Optimal warranty policies for systems with imperfect repair," European Journal of Operational Research, Elsevier, vol. 199(1), pages 187-197, November.
    13. Wu, Chin-Chun & Chou, Chao-Yu & Huang, Chikong, 2009. "Optimal price, warranty length and production rate for free replacement policy in the static demand market," Omega, Elsevier, vol. 37(1), pages 29-39, February.
    14. Harun Öztürk, 2019. "Modeling an inventory problem with random supply, inspection and machine breakdown," OPSEARCH, Springer;Operational Research Society of India, vol. 56(2), pages 497-527, June.
    15. Gede Agus Widyadana & Hui Ming Wee, 2012. "An economic production quantity model for deteriorating items with preventive maintenance policy and random machine breakdown," International Journal of Systems Science, Taylor & Francis Journals, vol. 43(10), pages 1870-1882.
    16. Yeh, Ruey Huei & Ho, Wen-Tsung & Tseng, Sheng-Tsaing, 2000. "Optimal production run length for products sold with warranty," European Journal of Operational Research, Elsevier, vol. 120(3), pages 575-582, February.
    17. Sana, Shib Sankar, 2010. "An economic production lot size model in an imperfect production system," European Journal of Operational Research, Elsevier, vol. 201(1), pages 158-170, February.
    18. Biswajit Sarkar & Kripasindhu Chaudhuri & Shib Sankar Sana, 2010. "A stock-dependent inventory model in an imperfect production process," International Journal of Procurement Management, Inderscience Enterprises Ltd, vol. 3(4), pages 361-378.
    19. Manoranjan De & Barun Das & Manoranjan Maiti, 2016. "EPL models for complementary and substitute items under imperfect production process with promotional cost and selling price dependent demands," OPSEARCH, Springer;Operational Research Society of India, vol. 53(2), pages 259-277, June.
    20. Wee, Hui Ming & Widyadana, Gede Agus, 2013. "A production model for deteriorating items with stochastic preventive maintenance time and rework process with FIFO rule," Omega, Elsevier, vol. 41(6), pages 941-954.
    21. Sana, Shib Sankar, 2010. "A production-inventory model in an imperfect production process," European Journal of Operational Research, Elsevier, vol. 200(2), pages 451-464, January.
    22. van der Heijden, Matthieu & Iskandar, Bermawi P., 2013. "Last time buy decisions for products sold under warranty," European Journal of Operational Research, Elsevier, vol. 224(2), pages 302-312.
    23. Yeh, Ruey Huei & Chen, Ming-Yuh & Lin, Chen-Yi, 2007. "Optimal periodic replacement policy for repairable products under free-repair warranty," European Journal of Operational Research, Elsevier, vol. 176(3), pages 1678-1686, February.
    24. K.Y. Kung & Y.D. Huang & H.M. Wee & Y. Daryanto, 2019. "Production-Inventory System for Deteriorating Items with Machine Breakdown, Inspection, and Partial Backordering," Mathematics, MDPI, vol. 7(7), pages 1-26, July.
    25. Theodore S. Glickman & Paul D. Berger, 1976. "Optimal Price and Protection Period Decisions for a Product Under Warranty," Management Science, INFORMS, vol. 22(12), pages 1381-1390, August.
    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. Nobil, Erfan & Cárdenas-Barrón, Leopoldo Eduardo & Garza-Núñez, Dagoberto & Treviño-Garza, Gerardo & Céspedes-Mota, Armando & Loera-Hernández, Imelda de Jesús & Smith, Neale R. & Nobil, Amir Hossein, 2024. "Sustainability inventory management model with warm-up process and shortage," Operations Research Perspectives, Elsevier, vol. 12(C).
    2. Debopriya Dey & Samarjit Kar & Dilip Kumar Bhattacharya, 2024. "Periodic review policy in the production management of a single-item inventory with deterioration," Operational Research, Springer, vol. 24(2), pages 1-25, 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. Chen, Cheng-Kang & Lo, Chih-Chung & Weng, Tzu-Chun, 2017. "Optimal production run length and warranty period for an imperfect production system under selling price dependent on warranty period," European Journal of Operational Research, Elsevier, vol. 259(2), pages 401-412.
    2. Harun Öztürk, 2019. "Modeling an inventory problem with random supply, inspection and machine breakdown," OPSEARCH, Springer;Operational Research Society of India, vol. 56(2), pages 497-527, June.
    3. Harun Öztürk, 2021. "Optimal production run time for an imperfect production inventory system with rework, random breakdowns and inspection costs," Operational Research, Springer, vol. 21(1), pages 167-204, March.
    4. Bouslah, B. & Gharbi, A. & Pellerin, R., 2016. "Integrated production, sampling quality control and maintenance of deteriorating production systems with AOQL constraint," Omega, Elsevier, vol. 61(C), pages 110-126.
    5. K.Y. Kung & Y.D. Huang & H.M. Wee & Y. Daryanto, 2019. "Production-Inventory System for Deteriorating Items with Machine Breakdown, Inspection, and Partial Backordering," Mathematics, MDPI, vol. 7(7), pages 1-26, July.
    6. Chang Wook Kang & Misbah Ullah & Mitali Sarkar & Muhammad Omair & Biswajit Sarkar, 2019. "A Single-Stage Manufacturing Model with Imperfect Items, Inspections, Rework, and Planned Backorders," Mathematics, MDPI, vol. 7(5), pages 1-18, May.
    7. Afsahi, Mohsen & Shafiee, Mahmood, 2020. "A stochastic simulation-optimization model for base-warranty and extended-warranty decision-making of under- and out-of-warranty products," Reliability Engineering and System Safety, Elsevier, vol. 197(C).
    8. Bouslah, Bassem & Gharbi, Ali & Pellerin, Robert, 2013. "Joint optimal lot sizing and production control policy in an unreliable and imperfect manufacturing system," International Journal of Production Economics, Elsevier, vol. 144(1), pages 143-156.
    9. Rezapour, Shabnam & Allen, Janet K. & Mistree, Farrokh, 2016. "Reliable flow in forward and after-sales supply chains considering propagated uncertainty," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 93(C), pages 409-436.
    10. Wee, Hui Ming & Widyadana, Gede Agus, 2013. "A production model for deteriorating items with stochastic preventive maintenance time and rework process with FIFO rule," Omega, Elsevier, vol. 41(6), pages 941-954.
    11. Shafiee, Mahmood & Chukova, Stefanka, 2013. "Maintenance models in warranty: A literature review," European Journal of Operational Research, Elsevier, vol. 229(3), pages 561-572.
    12. Bimal Kumar Sett & Bikash Koli Dey & Biswajit Sarkar, 2020. "Autonomated Inspection Policy for Smart Factory—An Improved Approach," Mathematics, MDPI, vol. 8(10), pages 1-19, October.
    13. Kazaz, Burak & Sloan, Thomas W., 2013. "The impact of process deterioration on production and maintenance policies," European Journal of Operational Research, Elsevier, vol. 227(1), pages 88-100.
    14. Esmaeili, M. & Shamsi Gamchi, N. & Asgharizadeh, E., 2014. "Three-level warranty service contract among manufacturer, agent and customer: A game-theoretical approach," European Journal of Operational Research, Elsevier, vol. 239(1), pages 177-186.
    15. Sarkar, Mitali & Sarkar, Biswajit, 2013. "An economic manufacturing quantity model with probabilistic deterioration in a production system," Economic Modelling, Elsevier, vol. 31(C), pages 245-252.
    16. Om Prakash & A.R. Roy & A. Goswami, 2014. "Stochastic manufacturing system with process deterioration and machine breakdown," International Journal of Systems Science, Taylor & Francis Journals, vol. 45(12), pages 2539-2551, December.
    17. Kirkizoğlu, Zeynep & Karaer, Özgen, 2022. "After-sales service and warranty decisions of a durable goods manufacturer," Omega, Elsevier, vol. 113(C).
    18. Wei Xie, 2017. "Optimal pricing and two-dimensional warranty policies for a new product," International Journal of Production Research, Taylor & Francis Journals, vol. 55(22), pages 6857-6870, November.
    19. Peymankar, Mahboobe & Dehghanian, Farzad & Ghiami, Yousef & Abolbashari, Mohammad Hassan, 2018. "The effects of contractual agreements on the economic production quantity model with machine breakdown," International Journal of Production Economics, Elsevier, vol. 201(C), pages 203-215.
    20. Shaofu Du & Yujiao Zhu & Tengfei Nie & Haisuo Yu, 2018. "Loss-averse preferences in a two-echelon supply chain with yield risk and demand uncertainty," Operational Research, Springer, vol. 18(2), pages 361-388, July.

    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:opsear:v:60:y:2023:i:2:d:10.1007_s12597-023-00628-1. 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.