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Modeling and analysis of a warranty policy using new and reconditioned parts

Author

Listed:
  • Navin Chari
  • Claver Diallo
  • Uday Venkatadri
  • Abdelhakim Khatab

Abstract

Remanufacturing processes such as refurbishing and reconditioning can extend the life of a product returned from the field. This provides financial opportunities and allows manufacturers to engage in sustainable practices. However, the inability to access a sufficient quantity of reconditioned components from end‐of‐life products can force the concurrent utilization of new components. This paper deals with the determination of an optimal warranty policy where a mixture of new and reconditioned components are used to carry out replacements upon failure for products under warranty. A mathematical optimization model is developed to maximize the manufacturer's expected total profit based on four decision variables: the warranty length, the sale price, the age of reconditioned components, and the proportion of reconditioned components to be used. A numerical procedure is used to compute the optimal solution. Numerical results are provided and discussed to demonstrate the validity and the added value of the proposed approach. Copyright © 2016 John Wiley & Sons, Ltd.

Suggested Citation

  • Navin Chari & Claver Diallo & Uday Venkatadri & Abdelhakim Khatab, 2016. "Modeling and analysis of a warranty policy using new and reconditioned parts," Applied Stochastic Models in Business and Industry, John Wiley & Sons, vol. 32(4), pages 539-553, July.
    • Handle: RePEc:wly:apsmbi:v:32:y:2016:i:4:p:539-553
    DOI: 10.1002/asmb.2178
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    Cited by:

    1. Bensmain, Yassir & Dahane, Mohammed & Bennekrouf, Mohammed & Sari, Zaki, 2019. "Preventive remanufacturing planning of production equipment under operational and imperfect maintenance constraints: A hybrid genetic algorithm based approach," Reliability Engineering and System Safety, Elsevier, vol. 185(C), pages 546-566.
    2. Liu, Zhuojun & Diallo, Claver & Chen, Jing & Zhang, Michael, 2020. "Optimal pricing and production strategies for new and remanufactured products under a non-renewing free replacement warranty," International Journal of Production Economics, Elsevier, vol. 226(C).
    3. Santos, Augusto César de Jesus & Cavalcante, Cristiano Alexandre Virgínio & Wu, Shaomin, 2023. "Maintenance policies and models: A bibliometric and literature review of strategies for reuse and remanufacturing," Reliability Engineering and System Safety, Elsevier, vol. 231(C).
    4. Liu, Zhuojun & Chen, Jing & Diallo, Claver, 2018. "Optimal production and pricing strategies for a remanufacturing firm," International Journal of Production Economics, Elsevier, vol. 204(C), pages 290-315.

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