Last time buy decisions for products sold under warranty
Manufacturers supplying products under warranty need a strategy to deal with failures during the warranty period: repair the product or replace it by a new one, depending on e.g. age and/or usage of the failed product. An (implicit) assumption in virtually all models is that new products to replace the failed ones are immediately available at given replacement costs. Because of the short life cycles of many products, manufacturing may be discontinued before the end of the warranty period. At that point in time, the supplier has to decide how many products to put on the shelf to replace failed products under warranty that will be returned from the field (the last time buy decision). This is a trade-off between product availability for replacement and costs of product obsolescence. In this paper, we consider the joint optimization of repair-replacement decisions and the last time buy quantity for products sold under warranty. We develop approximations to estimate the total relevant costs and service levels for this problem, and show that we can easily find near-optimal last time buy quantities using a numerical search. Comparison to discrete event simulation results shows an excellent performance of our methods.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 224 (2013)
Issue (Month): 2 ()
|Contact details of provider:|| Web page: http://www.elsevier.com/locate/eor|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Teunter, Ruud H. & Klein Haneveld, Willem K., 2002. "Inventory control of service parts in the final phase," European Journal of Operational Research, Elsevier, vol. 137(3), pages 497-511, March.
- Murthy, D. N. P. & Solem, O. & Roren, T., 2004. "Product warranty logistics: Issues and challenges," European Journal of Operational Research, Elsevier, vol. 156(1), pages 110-126, July.
- Karl Inderfurth & Kampan Mukherjee, 2008. "Decision support for spare parts acquisition in post product life cycle," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 16(1), pages 17-42, March.
- Yun, Won Young & Murthy, D.N.P. & Jack, N., 2008. "Warranty servicing with imperfect repair," International Journal of Production Economics, Elsevier, vol. 111(1), pages 159-169, January.
- M. Pourakbar & E. Laan & R. Dekker, 2014.
"End-of-Life Inventory Problem with Phaseout Returns,"
Production and Operations Management,
Production and Operations Management Society, vol. 23(9), pages 1561-1576, 09.
- Pourakbar, M. & van der Laan, E.A. & Dekker, R., 2011. "End-of-Life Inventory Problem with Phase-out Returns," Econometric Institute Research Papers EI 2011-12, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
- Teunter, Ruud H. & Klein Haneveld, Willem K., 1998. "The `final orderrs problem," European Journal of Operational Research, Elsevier, vol. 107(1), pages 35-44, May.
- Krikke, H.R. & van der Laan, E., 2009. "Last Time Buy and Control Policies With Phase-Out Returns : A Case Study in Plant Control Systems," Discussion Paper 2009-66, Tilburg University, Center for Economic Research.
- Pourakbar, M. & Frenk, J.B.G. & Dekker, R., 2010. "End-of-Life Inventory Decisions for Consumer Electronics Service Parts," Econometric Institute Research Papers EI 2009-48, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
- SamatlI-Pa, Glay & Taner, Mehmet R., 2009. "The role of repair strategy in warranty cost minimization: An investigation via quasi-renewal processes," European Journal of Operational Research, Elsevier, vol. 197(2), pages 632-641, September.
- Bermawi P. Iskandar & Nat Jack & D. N. Pra Murthy, 2012. "Two New Servicing Strategies For Products Sold With Warranty," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 29(03), pages 1-16.
- Jack, Nat & Van der Duyn Schouten, Frank, 2000. "Optimal repair-replace strategies for a warranted product," International Journal of Production Economics, Elsevier, vol. 67(1), pages 95-100, August. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:eee:ejores:v:224:y:2013:i:2:p:302-312. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.