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Optimization of maintenance policy under warranty length‐based demand with consideration of both manufacturer and buyer satisfaction

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  • Ali Salmasnia
  • Maryam Baratian

Abstract

This study proposes a model to optimize postsale services consisting of four factors: (a) the basic warranty length, (b) the extended warranty length, (c) the preventive maintenance level, and (d) the preventive maintenance interval. Furthermore, consumer demand for the product and extended warranty are considered as functions of the length of the basic warranty and extended warranty periods, respectively. Because buyer dissatisfaction with a product can lead to the loss of potential buyers and the switch of current customers to the competitors, both manufacturer and buyer satisfaction are considered in the model. Three comparative studies are done for showing the effectiveness of the model. The first one compares the results of simultaneous optimization from the two perspectives of manufacture and customer with the single‐objective optimization results from each of the mentioned viewpoints. The second comparison studies the provision of extended warranty contract in the proposed model, and the third comparison investigates the effect of preventive maintenance actions on the results of the model.

Suggested Citation

  • Ali Salmasnia & Maryam Baratian, 2020. "Optimization of maintenance policy under warranty length‐based demand with consideration of both manufacturer and buyer satisfaction," Applied Stochastic Models in Business and Industry, John Wiley & Sons, vol. 36(4), pages 586-603, July.
    • Handle: RePEc:wly:apsmbi:v:36:y:2020:i:4:p:586-603
    DOI: 10.1002/asmb.2512
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    References listed on IDEAS

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    1. 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.
    2. Jae‐Hak Lim & Dae‐Kyung Kim & Dong Ho Park, 2019. "Maintenance optimization for second‐hand products following periodic imperfect preventive maintenance warranty period," Applied Stochastic Models in Business and Industry, John Wiley & Sons, vol. 35(4), pages 1077-1089, July.
    3. 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.
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