IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v124y2010i1p198-205.html
   My bibliography  Save this article

Optimal age for preventive replacement under a combined fully renewable free replacement with a pro-rata warranty

Author

Listed:
  • Chien, Yu-Hung

Abstract

This paper focuses on an age-replacement policy for products under a new warranty strategy, which combines a fully renewable free replacement with a pro-rata warranty policy (called fully renewable FRW/PRW policy). For this combined warranty strategy, whenever a product fails within the warranty period, it is replaced by a new one and a new warranty is issued. Meanwhile, if the failure occurs during the first time interval (i.e., the free-replacement warranty (FRW) interval), replacement is made at no cost to the buyer; however, if the failure occurs during the second time interval (i.e., the pro-rata warranty (PRW) interval), replacement is made at a pro-rata cost to the buyer. Dividing the replacement age into three separate periods: within FRW, during PRW, and post-warranty. Then, given that the replacement age is in a certain interval, the cost model from the user/buyer perspective is developed, and the corresponding local optimal replacement age is derived such that the long run expected cost rate is minimized. Afterward, the global optimal replacement age is determined. Structural properties of these optimal policies are obtained and presented, and special cases of the model are discussed. Finally, a numerical example is given for illustration.

Suggested Citation

  • Chien, Yu-Hung, 2010. "Optimal age for preventive replacement under a combined fully renewable free replacement with a pro-rata warranty," International Journal of Production Economics, Elsevier, vol. 124(1), pages 198-205, March.
    • Handle: RePEc:eee:proeco:v:124:y:2010:i:1:p:198-205
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925-5273(09)00403-4
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. 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.
    2. Sheu, Shey-Huei & Chien, Yu-Hung, 2005. "Optimal burn-in time to minimize the cost for general repairable products sold under warranty," European Journal of Operational Research, Elsevier, vol. 163(2), pages 445-461, June.
    3. Yeh, Ruey Huei & Lo, Hui-Chiung, 2001. "Optimal preventive-maintenance warranty policy for repairable products," European Journal of Operational Research, Elsevier, vol. 134(1), pages 59-69, October.
    4. Kleyner, Andre & Sandborn, Peter, 2008. "Minimizing life cycle cost by managing product reliability via validation plan and warranty return cost," International Journal of Production Economics, Elsevier, vol. 112(2), pages 796-807, April.
    5. Yeh, Ruey Huei & Chen, Ming-Yuh & Lin, Chen-Yi, 2007. "Optimal periodic replacement policy for repairable products under free-repair warranty," European Journal of Operational Research, Elsevier, vol. 176(3), pages 1678-1686, February.
    6. Mitra, Amitava & Patankar, Jayprakash G., 1997. "Market share and warranty costs for renewable warranty programs," International Journal of Production Economics, Elsevier, vol. 50(2-3), pages 155-168, June.
    7. Yves Balcer & Izzet Sahin, 1986. "Replacement Costs Under Warranty: Cost Moments and Time Variability," Operations Research, INFORMS, vol. 34(4), pages 554-559, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Liu, Gia-Shie, 2011. "Dynamic group instantaneous replacement policies for unreliable Markovian service systems," International Journal of Production Economics, Elsevier, vol. 130(2), pages 203-217, April.
    2. Bouguerra, Soumaya & Chelbi, Anis & Rezg, Nidhal, 2012. "A decision model for adopting an extended warranty under different maintenance policies," International Journal of Production Economics, Elsevier, vol. 135(2), pages 840-849.
    3. Shafiee, Mahmood & Chukova, Stefanka, 2013. "Maintenance models in warranty: A literature review," European Journal of Operational Research, Elsevier, vol. 229(3), pages 561-572.
    4. Wu, Shaomin & Longhurst, Phil, 2011. "Optimising age-replacement and extended non-renewing warranty policies in lifecycle costing," International Journal of Production Economics, Elsevier, vol. 130(2), pages 262-267, April.
    5. Zhu, Qinghua & Li, Helong & Zhao, Senlin & Lun, Venus, 2016. "Redesign of service modes for remanufactured products and its financial benefits," International Journal of Production Economics, Elsevier, vol. 171(P2), pages 231-240.
    6. Gia-Shie Liu, 2019. "A Group Replacement Decision Support System Based on Internet of Things," Mathematics, MDPI, vol. 7(9), pages 1-23, September.
    7. Richardson, Steven & Kefford, Adrian & Hodkiewicz, Melinda, 2013. "Optimised asset replacement strategy in the presence of lead time uncertainty," International Journal of Production Economics, Elsevier, vol. 141(2), pages 659-667.
    8. Wen Liang Chang, 2015. "Optimal single-replacement for repairable products with different failure rate under a finite planning horizon," International Journal of Systems Science, Taylor & Francis Journals, vol. 46(6), pages 1003-1009, April.
    9. Chien, Yu-Hung, 2012. "The effects of a free-repair warranty on the discrete-time periodic replacement policy," International Journal of Production Economics, Elsevier, vol. 135(2), pages 832-839.
    10. M Shafiee & M Finkelstein & S Chukova, 2011. "Burn-in and imperfect preventive maintenance strategies for warranted products," Journal of Risk and Reliability, , vol. 225(2), pages 211-218, June.
    11. Safaei, Fatemeh & Taghipour, Sharareh, 2022. "Optimal preventive maintenance for repairable products with three types of failures sold under a renewable hybrid FRW/PRW policy," Reliability Engineering and System Safety, Elsevier, vol. 223(C).
    12. Nan Zhang & Mitra Fouladirad & Anne Barros, 2018. "Warranty analysis of a two-component system with type I stochastic dependence," Journal of Risk and Reliability, , vol. 232(3), pages 274-283, June.
    13. Park, Minjae & Mun Jung, Ki & Park, Dong Ho, 2013. "Optimal post-warranty maintenance policy with repair time threshold for minimal repair," Reliability Engineering and System Safety, Elsevier, vol. 111(C), pages 147-153.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shafiee, Mahmood & Chukova, Stefanka, 2013. "Maintenance models in warranty: A literature review," European Journal of Operational Research, Elsevier, vol. 229(3), pages 561-572.
    2. J-A Chen & Y-H Chien, 2007. "Optimal age-replacement policy for renewing warranted products," Journal of Risk and Reliability, , vol. 221(4), pages 229-237, December.
    3. Chien, Yu-Hung, 2008. "A general age-replacement model with minimal repair under renewing free-replacement warranty," European Journal of Operational Research, Elsevier, vol. 186(3), pages 1046-1058, May.
    4. 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.
    5. M Shafiee & M Finkelstein & S Chukova, 2011. "Burn-in and imperfect preventive maintenance strategies for warranted products," Journal of Risk and Reliability, , vol. 225(2), pages 211-218, June.
    6. Huang, Yeu-Shiang & Gau, Wei-Yo & Ho, Jyh-Wen, 2015. "Cost analysis of two-dimensional warranty for products with periodic preventive maintenance," Reliability Engineering and System Safety, Elsevier, vol. 134(C), pages 51-58.
    7. Cha, Ji Hwan & Finkelstein, Maxim, 2016. "On information-based warranty policy for repairable products from heterogeneous populationAuthor-Name: Lee, Hyunju," European Journal of Operational Research, Elsevier, vol. 253(1), pages 204-215.
    8. Wu, Shaomin & Longhurst, Phil, 2011. "Optimising age-replacement and extended non-renewing warranty policies in lifecycle costing," International Journal of Production Economics, Elsevier, vol. 130(2), pages 262-267, April.
    9. Levitin, Gregory & Xing, Liudong & Dai, Yuanshun, 2015. "Optimal loading of system with random repair time," European Journal of Operational Research, Elsevier, vol. 247(1), pages 137-143.
    10. Murthy, D. N. P. & Djamaludin, I., 2002. "New product warranty: A literature review," International Journal of Production Economics, Elsevier, vol. 79(3), pages 231-260, October.
    11. Safaei, Fatemeh & Taghipour, Sharareh, 2022. "Optimal preventive maintenance for repairable products with three types of failures sold under a renewable hybrid FRW/PRW policy," Reliability Engineering and System Safety, Elsevier, vol. 223(C).
    12. Chien, Yu-Hung & Zhang, Zhe George & Yin, Xiaoling, 2019. "On optimal preventive-maintenance policy for generalized Polya process repairable products under free-repair warranty," European Journal of Operational Research, Elsevier, vol. 279(1), pages 68-78.
    13. Lu, Zhen & Shang, Jennifer, 2019. "Warranty mechanism for pre-owned tech products: Collaboration between E-tailers and online warranty provider," International Journal of Production Economics, Elsevier, vol. 211(C), pages 119-131.
    14. Levitin, Gregory & Xing, Liudong & Dai, Yuanshun, 2015. "Optimal backup frequency in system with random repair time," Reliability Engineering and System Safety, Elsevier, vol. 144(C), pages 12-22.
    15. Prasanta Kumar Ghosh & Amalesh Kumar Manna & Jayanta Kumar Dey & Samarjit Kar, 2023. "Optimal production run in an imperfect production process with maintenance under warranty and product insurance," OPSEARCH, Springer;Operational Research Society of India, vol. 60(2), pages 720-752, June.
    16. Yeo, Wee Meng & Yuan, Xue-Ming, 2009. "Optimal warranty policies for systems with imperfect repair," European Journal of Operational Research, Elsevier, vol. 199(1), pages 187-197, November.
    17. Chien, Yu-Hung, 2019. "The optimal preventive-maintenance policy for a NHPBP repairable system under free-repair warranty," Reliability Engineering and System Safety, Elsevier, vol. 188(C), pages 444-453.
    18. Lianmin Zhang & Lei Guan & Daniel Zhuoyu Long & Houcai Shen & Huajun Tang, 2023. "Who is better off by selling extended warranties in the supply chain: the manufacturer, the retailer, or both?," Annals of Operations Research, Springer, vol. 328(2), pages 1557-1583, September.
    19. Wu, Chin-Chun & Chou, Chao-Yu & Huang, Chikong, 2007. "Optimal burn-in time and warranty length under fully renewing combination free replacement and pro-rata warranty," Reliability Engineering and System Safety, Elsevier, vol. 92(7), pages 914-920.
    20. Zhou, Chongwen & Chinnam, Ratna Babu & Dalkiran, Evrim & Korostelev, Alexander, 2017. "Bayesian approach to hazard rate models for early detection of warranty and reliability problems using upstream supply chain information," International Journal of Production Economics, Elsevier, vol. 193(C), pages 316-331.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:124:y:2010:i:1:p:198-205. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.