Optimal Extended Warranty Policies under Different Maintenance Options

Extended warranty has recently obtained increasing attention from both manufacturers and customers in China. In this paper,given the reality of China, two types of non-renewing extended warranty were proposed: one-dimensional extended warranty and two-dimensional extended warranty. And a combined warranty policy including pro-rata warranty policy and free-repair warranty policy was applied in these two types of warranty. Then the expected life-cycle cost models from the manufacturer and consumer's perspectives were developed considering different maintenance options. The optimal warranty policy, maintenance options,and warranty price were adopted in terms of a win-win interval which was determined by the maximum extra cost the consumer should pay and the minimum price the manufacture should sell at the extended warranty. Finally,a case study was given to prove the effectiveness and validity of the model.

Optimization of extended warranty cost for multi-component systems with economic dependence based on group maintenance

During extended warranty(EW)period,maintenance events play a key role in controlling the product systems within normal operations.However,the modelling of failure process and maintenance optimization is complicated owing to the complex features of the product system,namely,components of the multi-component system are interdependent with each other in some form.For the purpose of optimizing the EW pricing decision of the multi-component system scientifically and rationally,taking the series multi-component system with economic dependence sold with EW policy as a research object,this paper optimizes the imperfect preventive maintenance(PM)strategy from the standpoint of EW cost.Taking into consideration adjusting the PM moments of the components in the system,a group maintenance model is developed,in which the system is repaired preventively in accordance with a specified PM base interval.In order to compare with the system EW cost before group maintenance,the system EW cost model before group maintenance is developed.Numerical example demonstrates that offering group maintenance programs can reduce EW cost of the system to a great extent,thereby reducing the EW price,which proves to be a win-win strategy to manufacturers and users.

Two-stage optimization model for renewing warranty considering warranty deadline

Renewing warranty can provide customers with better service,and thus help manufacturers to gain market opportunities.In engineering practice,the cost for replacement is usually higher than the cost for maintenance,hence manufacturers often face huge challenge to reduce the warranty service cost.With consideration of the warranty deadline,we propose a two-stage optimization model for renewing warranty.In the first stage,a renewing warranty with deadline(RWD)policy is implemented,where the deadline represents the cumulative uptime threshold.When the cumulative uptime exceeds the deadline,the product will be minimally repaired and kept to the residual warranty period.When RWD is expired,the replacement warranty with limited repairs(RWLR)policy is applied.Under the free replacement and pro-rata warranty policy,the corresponding two-stage cost optimization model is established from the manufacturer’s perspective,the aim is to minimize the cost rate and obtain the optimal warranty period.A numerical example is provided to illustrate the validity of the proposed model,and the sensitivity analysis is also carried out.

A customized extended warranty policy with heterogeneous usage rate and purchasing date

To increase customers'satisfaction and promote product's competitiveness,a customized extended warranty(EW)policy is proposed,where the diversities in both the usage rate and purchase date are considered.The marginal approach is applied to describe the product's two-dimensional failure in terms of age and usage,respectively.Moreover,minimal repair is adopted to restore the failure,and the virtual age method is applied to depict the effect of preventive maintenance(PM).On this basis,an optimization model is established to minimize the maintenance cost and warranty cost from the manufacturer's view,and multiple factors are taken into account,including the PM's intensity and its period,and EW's interval,etc.A numerical case study is provided to illustrate the effectiveness of the proposed approach.The results show that by considering the product's usage rate and the purchasing date of EW,the number of failures as well as the cost of maintenance and warranty can be reduced effectively.

A decision model of optimal production reliability and warranty length in an imperfect production system

A decision model to maximize the total profit of manufacturers in an imperfect production system is constructed.In this model the production reliability and the warranty length are jointly used as decision variables for the case that products are sold with a warranty i.e. the demand is dependent on the warranty length and sale price.Also all the non-conforming quality defective items in the production process are refurbished to conform to quality ones at a cost. The existence and uniqueness of the optimal values of production reliability and the warranty length are proved by using the Euler-Lagrange method in analyzing the model.A numerical example is also provided to illustrate the effectiveness of the decision model.The sensitivity analysis of the key parameters of the optimal solution and objective value is presented in addition.

Optimal replacement policy of products with repair-cost threshold after the extended warranty

The reliability of the product sold under a warranty is usually maintained by the manufacturer during the warranty period. After the expiry of the warranty, however, the consumer confronts a problem about how to maintain the reliability of the product. This paper proposes, from the consumer's perspective, a replacement policy after the extended warranty, under the assumption that the product is sold under the renewable free replacement warranty (RFRW) policy in which the replacement is dependent on the repair-cost threshold. The proposed replacement policy is the replacement after the extended warranty is performed by the consumer based on the repair-cost threshold or preventive replacement (PR) age, which are decision variables. The expected cost rate model is derived from the consumer's perspective. The existence and uniqueness of the optimal solution that minimizes the expected cost rate per unit time are offered. Finally, a numerical example is presented to exemplify the proposed model.

Optimization of post-warranty sequential inspection for second-hand products

This paper considers an optimal sequential inspection schedule for a second-hand product after that the free nonrenewable warranty is expired. The length of warranty is prespecified and during the warranty period, the product is minimally repaired by the dealer when it fails. Following the expiration of the non-renewing warranty, the product is inspected and upgraded sequentially a fixed number of times at the expenses of the customer.At each inspection, the failure rate of the product is reduced proportionally so that the product is upgraded. The product is assumed to deteriorate as it ages and the replacement of the product occurs when a fixed number of inspections are rendered. In addition,the intervals between two successive inspections are assumed to decrease monotonically. The main objective of this paper is to determine the optimal improvement level to upgrade the product at each inspection so that the expected maintenance cost during the life cycle of the product is minimized from the perspective of the customer. Under the given cost structures, we derive an explicit formula to obtain the expected maintenance cost incurred during the life cycle of the product and discuss the method to find the optimal level of the improvement analytically in case the failure times follow the Weibull distribution. Numerical results are analyzed to observe the impact of relevant parameters on the optimal solution.

Warranty Cost Model Based on Optimal Preventive Maintenance Operations for Repairable Products

Most warranty cost models based on preventive maintenance operations are assumed that products improve at each preventive maintenance （PM） operation and the failure rate is reduced to the failure rate of new products or to some specified level. To make warranty cost models more suitable to real operations, a modeling method of the PM warranty cost was proposed with the situation where each PM operation slowed the rate of product degradation. A warranty cost model was built on PM operations. On the basis of the cost model, both without and with reliability limit PM warranty policy, algorithms were presented to derive the optimal PM number and the optimal PM interval with an objective of minimizing expected total warranty cost over a t＇mite warranty period. Finally, to demonstrate the feasibility of the presented modeling method, Weibuil distribution cases were tested by numerical simulations. The simulation results indicate that the proposed modeling method is feasible and valid for resolving the optimal solution of the product warranty cost.

Reliability Model for Key Devices with Compound Preventive Warranty

With the warranty requirements of key and important devices,the compound preventive warranty policy was introduced.For the effectiveness of compound preventive maintenance, the maintenance mode of periodic replacement with functional checks was adopted, its failure risk analysis was carried on, and the warranty reliability model was established. On the basis of above research,a numerical example was given to illustrate the engineering application and generality of the warranty reliability model.

guarantee同warranty的区别

虽然这两个词可以相互替换使用,但是实际上它们还是有些区别的。特别是在广告术语中,区分两者是非常必要的。这主要是两者在广告中所要表达的意思和所起的怍用有所不同。下面就从术语的角度将这两个词加以分析和说明。有一本名为 A Guide to Correct Legal Issues In Advertising(by

WARRANTY STRATEGY IN A SUPPLY CHAIN WHEN TWO RETAILER'S EXTENDED WARRANTIES BUNDLED WITH THE PRODUCTS

We in this paper examine warranty strategy in a two-stage supply chain consisting of a manufacturer and two competing retailers. The manufacturer produces two substitute products and markets them through the two retailers to a group of consumers, respectively. For each type of products, the manufacRtrer＇s base warranty and a retailer＇s extended warranty are bundled with the product. We use game theoretic models to explore the interactions between the two types of warranties and the competition between the retailers. For this purpose, two scenarios are considered： no retailer and both the two retailers providing the extended warranties, respectively. In each scenario, the manufacturer＇s base warranties are assumed to be offered. Our results show that when the retailers offer their extended warranties, the manufacturer has no incentive to offer the base warranties; otherwise, the manufacturer has to provide the base warranties. The competition between retailers in terms of the product substitutability has no impact on warranty decisions, but affects all players＇ profits in the supply chain. The manufacturer can provide a longer warranty length and higher customer welfare to a customer than the retailers do, if it is more efficient than the retailers in warranty cost-efficiency, and vice versa.

Coordinating an Extended Warranty Supply Chain under Increasing,Constant and Decreasing Product Failure Rates

A product typically exhibits three different failure rates across its lifetime:increasing,decreasing,or constant.This paper studies how the characteristics of failure rate impact the supply chain coordination for an extended warranty program involving a manufacturer and a retailer.A two-stage Stackelberg game is utilized to model the interaction between these two players.Two extended warranty channel structures are compared depending on whether the manufacturer or the retailer offers the warranty service.The analysis shows that the failure rate trend during the warranty period has different effects on the coordination of the service supply chain.When a product has an increasing or constant failure rate,the optimal length of extended warranty offered by the retailer is longer than that of the manufacturer,while the optimal length is shorter for a product with a decreasing failure rate.If a product during the warranty coverage has an increasing or constant failure rate,a longer extended warranty period will motivate customers to buy the product without the warranty,whereas more customers will buy both the product and the warranty if the product experiences a decreasing failure rate.It is concluded that,if the manufacturer and the retailer incur the same warranty service cost,the total profit in the supply chain is higher when the manufacturer offers the extended warranty.From the game participants'perspective,the one which sells the extended warranty will obtain more profit.

Optimal Age Replacement Policy with Replacement Occurrence While the Warranty is in Effect

This study considers an age replacement policy(ARP) for a repairable product with an increasing failure rate with and without a product warranty. As for the warranty policy to consider in association with such an age replacement policy, we adapt a renewable minimal repair-replacement warrant(MRRW) policy with 2D factors of failure time of the product and its corresponding repair time. The expected cost rate during the life cycle of the product is utilized as a criterion to find the optimal policies for both with and without the product warranty. We determine the optimal replacement age that minimizes the objective function which evaluates the expected cost rate during the product cycle and investigate the impact of several factors on the optimal replacement age. The main objective of this study lies on the generalization of the classical age replacement policy to the situation where a renewable warranty depending on 2D factors is in effect. We present some interesting observations regarding the effect of relevant factors based on numerical analysis.

Warranty and Preventive Maintenance Analysis for Sustainable Reverse Supply Chains

In addition to being environmentally friendly,remanufactured products are popular with consumers because they offer the latest technology at a lower price,in comparison to brand new products.However,some consumers hesitate to buy remanufactured products because they are skeptical about their quality.Thus,they are unsure of the extent to which the product will render services when compared to a new product.A promotional marketing strategy employed by remanufacturers is to offer warranties for these products.To that end,this study scrutinizes the impact of offering non-renewing warranties on remanufactured products.Specifically,in this paper,a methodology is suggested,which simultaneously minimizes the cost incurred by the remanufacturers and maximizes consumer confidence toward buying remanufactured products.This study uses a discrete-event simulation to optimize the implementation of a two-dimensional non-renewing warranty policy for remanufactured products.The implementation is illustrated using a specific product recovery system called the Advanced Remanufacturing-To-Order system.The experiments in the study were designed using Taguchi’s Orthogonal Arrays to represent the entire domain of the recovery system to observe system behavior under various experimental conditions.

Modelling Upgrading Maintenance Policy in the One-Dimensional Renewing Warranty Period

In the one-dimensional renewing warranty period,the quality of the spares for product is likely to be improved during the warranty period.Therefore,upgrading maintenance becomes more and more common.Then the manufacturers(customers) may have to decide whether or not to provide(buy) the warranty considering upgrading maintenance.This paper presents a mathematical model considering upgrading maintenance for products with multiple failure modes.Upgrading maintenance is taken into account with the assumption that the warranted item is upgraded one time during the warranty cycle.The upgrading maintenance is carried out,when the corrective maintenance is taken place.After upgrading maintenance,the high-quality spares are used to replace the failed item.In the numerical example,the results of the models are calculated.Monte Carlo simulation results are compared with the analytical results to demonstrate the correctness and efficiency of the proposed models considering upgrading maintenance.

EXTENDED WARRANTY STRATEGIES FOR ONLINE SHOPPING SUPPLY CHAIN WITH COMPETING SUPPLIERS CONSIDERING COMPONENT RELIABILITY

This article presents the issue of extended warranty and management strategies in a three-echelon competing online shopping supply chain with price- and base warranty period-dependent demand. We employ game theory to develop decision models to explore the interactions between component suppliers and the manufacturer, as well as competition between two component suppliers. Products and extended warranty are sold by an online store, which is the leader in the Stackelberg game. Two scenarios are considered： either the manufacturer offers a prepaid extended warranty to customers or doses not. In each scenario, base warranties are assumed to be bundled with products. Our results show that when the manufacturer＇s repair costs change in a proper range, providing extended warranty can benefit both the manufacturer and the online store; otherwise, the manufacturer has no incentive to offer the extended warranty. Reducing repair costs, improving component reliability, or shortening the base warranty period allows the manufacturer to realize significantly better value of the extended warranty. High component reliability benefits both the manufacturer and the online store, with the manufacturer reaping more benefit. Extending the length of the base warranty adversely affects profit of the manufacturer and the value of the extended warranty.

Warranty Claims Forecasting for New Products Sold with a Two-Dimensional Warranty

Warranty claims forecasting plays an increasingly important role not only for preparing financial plans but also for optimizing warranty policy and improving after-sale services.In the case of new products,an important feature is that the new generation of products often has a close connection with the previous generations of products it replaces.Thus,the warranty claims data of the previous generations of products can be used for extracting reliability information of new products.In this context,we propose a warranty claims forecasting model considering usage rate for new products sold with a two-dimensional warranty.The accelerate failure time model is introduced to investigate the effect of usage rate on product degradation.The non-homogeneous Poisson process is used to model failure counts of repairable products and the constrained maximum likelihood estimation method is used to estimate model parameters.The results of data experiments based on both simulation and real data collected from an automobile manufacturer in China show that the proposed model considering the varying usage rate outperforms the traditional models in forecasting the number of warranty claims.

FORECASTING AUTOMOBILE WARRANTY PERFORMANCE IN PRESENCE OF ‘MATURING DATA’ PHENOMENA USING MULTILAYER PERCEPTRON NEURAL NETWORK

Automobile companies that spend billions of dollars annually towards warranty cost, give high priority to warranty reduction programs. Forecasting of automobile warranty performance plays an important role towards these efforts. The forecasting process involves prediction of not only the specific months-in-service (MIS) warranty performance at certain future time, but also at future MIS values. However, 'maturing data' (also called warranty growth) phenomena that causes warranty performance at specific MIS values to change with time, makes such a forecasting task challenging. Although warranty forecasting methods such as log-log plots and dynamic linear models appear in literature, there is a need for applications addressing the well recognized issue of ‘maturing data’. In this paper we use an artificial neural network for the forecasting of warranty performance in presence of ‘maturing data’ phenomena. The network parameters are optimized by minimizing the training and testing errors using response surface methodology. This application shows the effectiveness of neural networks in the forecasting of automobile warranty performance in the presence of the ‘maturing data’ phenomena.

Coordination of e-commerce supply chain when e-commerce platform providing sales service and extended warranty service

With the rapid development of cybereconomy and the enhancement of sales service,many e-commerce platforms provide extended warranty service to alleviate consumers from worries about product quality when consumers purchasing products online.This study examines the decisions and coordination of the e-commerce supply chain where the e-commerce platform dominates and provides sales service and extended warranty service.The findings show that the centralised decision-making model is an ideal model because of the low sales price,high service level and high extended warranty price.With the increase of the consumers’sensitivity coefficient to the extended warranty service price,sales price increases but extended warranty service price and service level decrease,the retailer’s profit and the platform’s profit decrease.The proposed contract of‘revenue sharing joint commission’can realise the coordination of ecommerce supply chain.

ANALYSIS OF WARRANTY POLICIES

There are some warranty policies commonly used: (1) Free-replacement warranty policy (FRW). (2) Pro-rata warranty policy (PRW). (3) Combination policies. In this paper) a brief review of policies 1 and 2 as well as some new distribution properties of successive purchase times under the combination policies are given. In addition, a new warranty policy is suggested. Under this policy the failed item within free replacement period [0,W] is subjected to minimal repair. Under certain cost structure, the long run average cost of customers and the profit of producers are analyzed. Finally, some examples are given.