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Optimal decision for warranty with consideration of marketing and production capacity

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  • Chun-Wu Yeh
  • Chih-Chiang Fang

Abstract

A successful marketing strategy should be managed to integrate the decisions, such as pricing, post-sale service and production in order to maximise profits but most manufacturers did not fully consider how to integrate them into an effective one in the past. Therefore, in this study, we proposed a mathematical model and a corresponding solution algorithm to assist the decision-makers systematically to decide the synthetic decision. The decision-makers can make warranty and marketing decision according to their production capacity. Besides, the impacts on the profit, the sale, the price and the warranty when the related costs were varying are also discussed in the study, so that the decision-maker can more easily handle the possible situations. The failure times of the product in our study were drawn from a non-homogeneous Poisson process with a specific intensity function (linear, exponential or power law). A preventive maintenance programme was also considered in the warranty policy. Finally, a numerical example was given to demonstrate the effectiveness of the proposed model.

Suggested Citation

  • Chun-Wu Yeh & Chih-Chiang Fang, 2015. "Optimal decision for warranty with consideration of marketing and production capacity," International Journal of Production Research, Taylor & Francis Journals, vol. 53(18), pages 5456-5471, September.
    • Handle: RePEc:taf:tprsxx:v:53:y:2015:i:18:p:5456-5471
    DOI: 10.1080/00207543.2015.1010743
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    Cited by:

    1. 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.
    2. Ye, Zhenggeng & Yang, Hui & Cai, Zhiqiang & Si, Shubin & Zhou, Fuli, 2021. "Performance evaluation of serial-parallel manufacturing systems based on the impact of heterogeneous feedstocks on machine degradation," Reliability Engineering and System Safety, Elsevier, vol. 207(C).
    3. 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).
    4. Luo, Ming & Wu, Shaomin, 2018. "A mean-variance optimisation approach to collectively pricing warranty policies," International Journal of Production Economics, Elsevier, vol. 196(C), pages 101-112.

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