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.

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.

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.

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.

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.

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.

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.

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.