Healthcare Warranty Policies Optimization for Chronic Diseases Based on Delay Time Concept

Warranties for healthcare can be greatly beneficial for cost reductions and improvements in patient satisfaction. Under healthcare warranties, healthcare providers receive a lump sum payment for the entire care episode, which covers a bundle of healthcare services, including treatment decisions during initial hospitalization and subsequent readmissions, as well as disease-monitoring plans composed of periodic follow-ups. Higher treatment intensities and more radical monitoring strategies result in higher medical costs, but high treatment intensities reduce the baseline readmission rates. This study intends to provide a systematic optimization framework for healthcare warranty policies. In this paper, the proposed model allows healthcare providers to determine the optimal combination of treatment decisions and disease-monitoring policies to minimize the total expected healthcare warranty cost over the prespecified period. Given the nature of the disease progression, we introduced a delay time model to simulate the progression of chronic diseases. Based on this, we formulated an accumulated age model to measure the effect of follow-up on the patient’s readmission risk. By means of the proposed model, the optimal treatment intensity and the monitoring policy can be derived. A case study of pediatric type 1 diabetes mellitus is presented to illustrate the applicability of the proposed model. The findings could form the basis of developing effective healthcare warranty policies for patients with chronic diseases.

Reliability-Informed Life Cycle Warranty Cost and Life Cycle Analysis of Newly Manufactured and Remanufactured Units

Standard life cycle techniques such as life cycle warranty cost (LCWC) analysis and life cycle analysis (LCA) are used to respectively quantify the relative economical and environmental advantages of remanufactured goods while simultaneously identifying avenues for improvement. In this paper, we contribute to the literature on life cycle studies by incorporating reliability into LCWC analysis and LCA with the goal of improving long-term/multiple life cycle decision making. We develop a branched power-law model to incorporate the physical degradation mechanisms leading to reduced reuse rates of system parts over multiple life cycles. We then follow a standard LCA protocol to quantify the difference between a new unit and its remanufactured version in terms of environmental impact items such as abiotic depletion potential, global warming potential, and energy consumption. We then devise four practical warranty policies that vary in the choice of replacement and/or provision for extended warranty. All possible replacement scenarios for multiple life cycles are explored for each policy and a mathematically rigorous framework is provided, where the reliability information is used to calculate probabilistic LCWC and life cycle impact items. This reliability-informed LCWC analysis and LCA framework enables design engineers to compare design options and warranty policies by quantifying both economical and environmental impacts to aid in decision making. Although the framework is presented in a general form applicable to any engineered system, we demonstrate the utility of this framework by using a case study of an infinitely variable transmission used in agricultural equipment.

Reliability-Informed Life-Cycle Warranty Cost Analysis: A Case Study on a Transmission in Agricultural Equipment

In agricultural and industrial equipment, both new and remanufactured systems are often available for warranty coverage. In such cases, it may be challenging for equipment manufacturers to properly trade-off between the system reliability and the cost associated with a replacement option (e.g., replace with a new or remanufactured system). To address this problem, we present a reliability-informed life-cycle warranty cost (LCWC) analysis framework that enables equipment manufacturers to evaluate different warranty policies. These warranty policies differ in whether a new or remanufactured system is used for replacement in the case of product failure. The novelty of this LCWC analysis framework lies in its ability to incorporate real-world field reliability data into warranty policy assessment using probabilistic warranty cost models that consider multiple life cycles. First, the reliability functions for the new and remanufactured systems are built as the time-to-failure distributions that provide the best-fit to the field reliability data. Then, these reliability functions and their corresponding warranty policies are used to build the LCWC models according to the specific warranty terms. Finally, Monte Carlo simulation is used to propagate the time-to-failure uncertainty of each system, modeled by its reliability function, through each LCWC model to produce a probability distribution of the LCWC. The effectiveness of the proposed reliability-informed LCWC analysis framework is demonstrated with a real-world case study on a transmission used in some agricultural equipment.

Two-stage flexible warranty decision-making considering downtime loss

Most existing warranty policies are rigid, and the downtime loss is also not taken into account. This study develops a two-stage decision framework to design flexible warranty policies, where the downtime loss is considered. In the first stage, by minimizing the warranty service cost, a fixed warranty policy is provided to determine the baseline of preventive maintenance’s times and effort. In the second stage, customers have three options to increase preventive maintenance times, preventive maintenance effort, or both of them, which results in three types of flexible warranty policies. The additional maintenance cost for the increased preventive maintenance times and/or preventive maintenance effort is paid by the customers. Besides, the flexible policies are optimized to minimize customer’s cost, which is the sum of the downtime loss and shared maintenance cost. A practical example is provided to illustrate the effectiveness of the proposed flexible warranty policies. The results indicate that compared with the fixed warranty policies, both the manufacturer and customers can benefit from the proposed flexible policies, especially when the downtime loss is substantial. Moreover, the proposed policy is more effective when the warranty period is longer.