Determination of Optimal Warranty Period with Preventive Maintenance Actions for Items from Heterogeneous Populations

In this study, we develop an optimal maintenance policy with replacement service and minimal repair service for items from heterogeneous populations and determine the optimal warranty length and repair time threshold. We consider the information-based repair-replacement policy model and develop the formula to evaluate the expected cost rate during the product life cycle. A general formulation is derived for the expected cost rate under a warranty policy for items of heterogeneous populations. When a replacement service and minimal repair service are provided for a failed item, then an item from a weak population has the property of an item from a weak population after service. Similarly, an item from a strong population has the property of an item from a strong population after service. We define the optimal maintenance strategies to minimize the expected cost rate with failure time and repair time for items with heterogeneous reliability characteristics. The effects of parameters of the intensity function for the failure times on the optimal length of the warranty period are studied numerically. Assuming that the product deteriorates, we illustrate the proposed approach using numerical applications and observe the impacts of relevant parameters on the optimal length of the warranty period.

Game Theoretic Analysis of After-Sales Service in Two-Echelon Supply Chain with Warranty Sensitive Demand

After-sales service contract is widely popular in business. Although both the cases of manufacturer offering warranty and retailer offering warranty are common in market, the differences between them have been few studied. In this paper, we build a two-echelon supply chain in which a manufacturer produces limit quality products and sells them to a retailer. To promote sales, the manufacturer or retailer offers a free-replacement warranty to the customers. Customer’s demand is affected by the warranty length. We investigate the game relationships between the supply chain members. We find that the warranty length negatively relates to the product quality in both the manufacturer offering warranty case and the retailer offering warranty case. When retailer’s profit margin is not low, the retailer offers a longer warranty than the manufacturer and vice versa. Profit of the supply chain is also analyzed along with a numerical study.