Two-dimensional extended warranty strategy including maintenance level and purchase time: A win-win perspective

Facing the uncertainty in transaction of two-dimensional extended warranty, a flexible pricing model is presented considering imperfect preventive maintenance combined with the degradation characteristics of item. The measure of two-dimensional preventive maintenance is carried out based on specified age interval or usage interval, the effect of imperfect preventive maintenance is described by age reduction model. The extended warranty cost is modeled from the perspective of manufacturer and customer, the method of gridding search is employed to optimize the maintenance strategy under different cases. Moreover, customized extended warranty price and warranty services are proposed on the basis of consumer usage rates. The results demonstrate that it is helpful to maximize the benefit of vendor by providing customized warranty strategy, the implementation of preventive maintenance during the whole warranty period can effectively reduce warranty cost for both sides.

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Customized Preventive Maintenance Strategies for Products Sold with Two-Dimensional Warranty

Mathematical Problems in Engineering ◽

10.1155/2021/5576455 ◽

2021 ◽

Vol 2021 ◽

pp. 1-12

Author(s):

Fangqi Dong ◽

Huaqiang Wang ◽

Feng Men ◽

Lijun Liang

Keyword(s):

Numerical Analysis ◽

Preventive Maintenance ◽

Programming Model ◽

Two Dimensional ◽

Maintenance Costs ◽

Maintenance Strategies ◽

Warranty Period ◽

Extended Warranty ◽

Warranty Cost ◽

Warranty Costs

Two-dimensional warranty has played a significant role in improving product quality and competitiveness. However, two-dimensional basic warranty (BW) and extended warranty (EW) have not yet been combined effectively, and the customized maintenance strategies based on the consumers’ heterogeneity have been quite limited, which result in high maintenance costs. In this paper, the possibility of reducing warranty cost over BW and EW is explored by classifying customers based on their usage rates and then offering them with customized preventive maintenance (PM) strategies. By considering the purchasing ratio of EW contracts, the PM strategies for BW and EW are closely combined by the bi-level programming model. Numerical analysis is given to show the application of the proposed warranty strategy, and the significant findings and sensitivity of the main parameters are analyzed in the end. The findings demonstrate that the customized PM strategies combining BW and EW can effectively reduce warranty costs within the warranty period and provide a scientific guidance for manufacturers to design a more reasonable PM strategy.

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A Framework in Determining Extended Warranty by Using Two Dimensional Delay Time Model

Advanced Materials Research ◽

10.4028/www.scientific.net/amr.433-440.2997 ◽

2012 ◽

Vol 433-440 ◽

pp. 2997-3002 ◽

Cited By ~ 6

Author(s):

Hairudin Abdul Majid ◽

Lili Ayu Wulandhari ◽

Azzurah A. Samah ◽

Ang Jun Chin

Keyword(s):

Delay Time ◽

Time Distribution ◽

Arrival Rate ◽

Distribution Data ◽

Two Dimensional ◽

Time Model ◽

Extended Warranty ◽

Period Estimation ◽

Optimal Period ◽

The Impact

A framework for determining optimal period and cost in extended warranty is proposed in this paper. The optimal period and cost is derived from two-dimensional delay time model. Two-dimensional delay time model is governed by age and mileage. Age and mileage gives effect for the rate of defect arrival λ. The steps for obtaining the model to estimate the optimal period cost of extended warranty is presented. It starts from modeling the defect arrival rate, the impact of preventive maintenance toward the defect arrival rate; determine the delay time distribution, data analyzing and the last optimal cost and period estimation for extended warranty.

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