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Optimal production run length and warranty period for an imperfect production system under selling price dependent on warranty period

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  • Chen, Cheng-Kang
  • Lo, Chih-Chung
  • Weng, Tzu-Chun

Abstract

This paper extends the extant literature to consider that the selling price of the product sold with warranty policy is a function of the length of the warranty period for an imperfect production system. A product under a free replacement/repair warranty policy is considered and the lifetime distribution of the product is assumed to be exponentially distributed. We seek to maximize the total profit per item through optimal determinations of the production run length and the warranty period. Based on the proposed mathematical model, we will derive some lemmas and the propositions to carry out an efficient solution procedure to determine the optimal warranty period and production run length. The numerical examples are given to illustrate the features of the proposed maximizing profit model and to show all of the possible cases of the solution procedure.

Suggested Citation

  • Chen, Cheng-Kang & Lo, Chih-Chung & Weng, Tzu-Chun, 2017. "Optimal production run length and warranty period for an imperfect production system under selling price dependent on warranty period," European Journal of Operational Research, Elsevier, vol. 259(2), pages 401-412.
    • Handle: RePEc:eee:ejores:v:259:y:2017:i:2:p:401-412
    DOI: 10.1016/j.ejor.2016.10.038
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    Cited by:

    1. Ateka Banu & Shyamal Kumar Mondal, 2018. "An integrated inventory model with warranty dependent credit period under two policies of a manufacturer," OPSEARCH, Springer;Operational Research Society of India, vol. 55(3), pages 677-702, November.
    2. Sarkar, Biswajit & Seok, Hyesung & Jana, Tapas Kumar & Dey, Bikash Koli, 2023. "Is the system reliability profitable for retailing and consumer service of a dynamical system under cross-price elasticity of demand?," Journal of Retailing and Consumer Services, Elsevier, vol. 75(C).
    3. Mitra, Amitava, 2021. "Warranty parameters for extended two-dimensional warranties incorporating consumer preferences," European Journal of Operational Research, Elsevier, vol. 291(2), pages 525-535.
    4. Luo, Ming & Wu, Shaomin, 2019. "A comprehensive analysis of warranty claims and optimal policies," European Journal of Operational Research, Elsevier, vol. 276(1), pages 144-159.
    5. Shang, Lijun & Liu, Baoliang & Qiu, Qingan & Yang, Li, 2023. "Three-dimensional warranty and post-warranty maintenance of products with monitored mission cycles," Reliability Engineering and System Safety, Elsevier, vol. 239(C).
    6. Ivan Darma Wangsa & Hui Ming Wee & Shih-Hsien Tseng, 2019. "A coordinated vendor–buyer system considering loss and damage claims, insurance cost and stochastic lead time," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 10(3), pages 384-398, June.
    7. Lijun Shang & Yongjun Du & Cang Wu & Chengye Ma, 2022. "A Bivariate Optimal Random Replacement Model for the Warranted Product with Job Cycles," Mathematics, MDPI, vol. 10(13), pages 1-16, June.
    8. Lijun Shang & Xiguang Yu & Yongjun Du & Anquan Zou & Qingan Qiu, 2022. "An Optimal Random Hybrid Maintenance Policy of Systems under a Warranty with Rebate and Charge," Mathematics, MDPI, vol. 10(18), pages 1-19, September.
    9. Lijun Shang & Guojun Shang & Yongjun Du & Qingan Qiu & Li Yang & Qinglai Dong, 2022. "Post-Warranty Replacement Models for the Product under a Hybrid Warranty," Mathematics, MDPI, vol. 10(10), pages 1-18, May.
    10. Shaojian Qu & Hui Yang & Ying Ji, 2021. "Low-carbon supply chain optimization considering warranty period and carbon emission reduction level under cap-and-trade regulation," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(12), pages 18040-18067, December.
    11. Xiaodong Zhu & Lingfei Yu & Ji Zhang & Chenliang Li & Yizhao Zhao, 2018. "Warranty Decision Model and Remanufacturing Coordination Mechanism in Closed-Loop Supply Chain: View from a Consumer Behavior Perspective," Sustainability, MDPI, vol. 10(12), pages 1-21, December.
    12. Bimal Kumar Sett & Bikash Koli Dey & Biswajit Sarkar, 2020. "Autonomated Inspection Policy for Smart Factory—An Improved Approach," Mathematics, MDPI, vol. 8(10), pages 1-19, October.
    13. Anushri Maji & Asoke Kumar Bhunia & Shyamal Kumar Mondal, 2022. "A production-reliability-inventory model for a series-parallel system with mixed strategy considering shortage, warranty period, credit period in crisp and stochastic sense," OPSEARCH, Springer;Operational Research Society of India, vol. 59(3), pages 862-907, September.
    14. Luo, Ming & Wu, Shaomin, 2018. "A value-at-risk approach to optimisation of warranty policy," European Journal of Operational Research, Elsevier, vol. 267(2), pages 513-522.

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