IDEAS home Printed from https://ideas.repec.org/a/eee/reensy/v96y2011i2p286-291.html
   My bibliography  Save this article

On optimal upgrade level for used products under given cost structures

Author

Listed:
  • Shafiee, Mahmood
  • Finkelstein, Maxim
  • Chukova, Stefanka

Abstract

In spite of the growing share of the second-hand market, often customers of used products encounter the following three problems: (a) they are uncertain regarding the durability and performance of these products due to lack of information on the item’s past usage and maintenance history, (b) they are uncertain about the accurate pricing of warranties and the post-warranty repair costs, and (c) sometimes, right after the sale, used items may have high failure rate and could be harmful to their new owner. Due to these problems, the dealers are currently carrying out actions such as overhaul and upgrade of the used products before their release. Reliability improvement, which is closely related to the concept of warranty, for used products is a relatively new concept and has received very limited attention. This paper also develops a stochastic model which results in the derivation of the optimal expected upgrade level under given structures of the profit and failure rate functions. We provide a numerical study to illustrate our results.

Suggested Citation

  • Shafiee, Mahmood & Finkelstein, Maxim & Chukova, Stefanka, 2011. "On optimal upgrade level for used products under given cost structures," Reliability Engineering and System Safety, Elsevier, vol. 96(2), pages 286-291.
    • Handle: RePEc:eee:reensy:v:96:y:2011:i:2:p:286-291
    DOI: 10.1016/j.ress.2010.07.008
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0951832010001717
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ress.2010.07.008?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    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. Samrout, M. & Châtelet, E. & Kouta, R. & Chebbo, N., 2009. "Optimization of maintenance policy using the proportional hazard model," Reliability Engineering and System Safety, Elsevier, vol. 94(1), pages 44-52.
    2. Kijima, Masaaki & Morimura, Hidenori & Suzuki, Yasusuke, 1988. "Periodical replacement problem without assuming minimal repair," European Journal of Operational Research, Elsevier, vol. 37(2), pages 194-203, November.
    3. Finkelstein, Maxim, 2009. "Virtual age of non-repairable objects," Reliability Engineering and System Safety, Elsevier, vol. 94(2), pages 666-669.
    4. Maxim Finkelstein, 2008. "Failure Rate Modelling for Reliability and Risk," Springer Series in Reliability Engineering, Springer, number 978-1-84800-986-8, January.
    5. Bartholomew-Biggs, Michael & Zuo, Ming J. & Li, Xiaohu, 2009. "Modelling and optimizing sequential imperfect preventive maintenance," Reliability Engineering and System Safety, Elsevier, vol. 94(1), pages 53-62.
    6. Jack, N. & Iskandar, B.P. & Murthy, D.N.P., 2009. "A repair–replace strategy based on usage rate for items sold with a two-dimensional warranty," Reliability Engineering and System Safety, Elsevier, vol. 94(2), pages 611-617.
    7. Mahmood Shafiee & Stefanka Chukova & Won Yun & Seyed Niaki, 2011. "On the investment in a reliability improvement program for warranted second-hand items," IISE Transactions, Taylor & Francis Journals, vol. 43(7), pages 525-534.
    8. 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.
    9. Finkelstein, Maxim, 2007. "On statistical and information-based virtual age of degrading systems," Reliability Engineering and System Safety, Elsevier, vol. 92(5), pages 676-681.
    10. Ming Tan, Cher & Raghavan, Nagarajan, 2008. "A framework to practical predictive maintenance modeling for multi-state systems," Reliability Engineering and System Safety, Elsevier, vol. 93(8), pages 1138-1150.
    11. Jung, Ki Mun & Park, Minjae & Park, Dong Ho, 2010. "System maintenance cost dependent on life cycle under renewing warranty policy," Reliability Engineering and System Safety, Elsevier, vol. 95(7), pages 816-821.
    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. Park, Minjae & Jung, Ki Mun & Park, Dong Ho, 2020. "Warranty cost analysis for second-hand products under a two-stage repair-or-full refund policy," Reliability Engineering and System Safety, Elsevier, vol. 193(C).
    2. Finkelstein, Maxim, 2015. "On the optimal degree of imperfect repair," Reliability Engineering and System Safety, Elsevier, vol. 138(C), pages 54-58.
    3. Wu, Shaomin, 2013. "A review on coarse warranty data and analysis," Reliability Engineering and System Safety, Elsevier, vol. 114(C), pages 1-11.
    4. 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).
    5. Lo, Hui-Chiung & Yu, Rouh-Yun, 2013. "A study of quality management strategy for reused products," Reliability Engineering and System Safety, Elsevier, vol. 119(C), pages 172-177.
    6. 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.
    7. Seyed Ahmad Yazdian & Kamran Shahanaghi & Ahmad Makui, 2016. "Joint optimisation of price, warranty and recovery planning in remanufacturing of used products under linear and non-linear demand, return and cost functions," International Journal of Systems Science, Taylor & Francis Journals, vol. 47(5), pages 1155-1175, April.
    8. Ammar Y. Alqahtani & Surendra M. Gupta, 2017. "One-Dimensional Renewable Warranty Management within Sustainable Supply Chain," Resources, MDPI, vol. 6(2), pages 1-26, April.
    9. Mohamed Noomane Darghouth & Anis Chelbi & Daoud Ait-kadi, 2017. "Investigating reliability improvement of second-hand production equipment considering warranty and preventive maintenance strategies," International Journal of Production Research, Taylor & Francis Journals, vol. 55(16), pages 4643-4661, August.
    10. Shafiee, Mahmood & Chukova, Stefanka, 2013. "Maintenance models in warranty: A literature review," European Journal of Operational Research, Elsevier, vol. 229(3), pages 561-572.
    11. Dai, Anshu & Wei, Guanzhou & Wang, Dongfan & He, Zhen & He, Shuguang, 2021. "The opportunity study of PM strategy for second-hand products sold with a two-dimensional warranty," Reliability Engineering and System Safety, Elsevier, vol. 214(C).
    12. Santos, Augusto César de Jesus & Cavalcante, Cristiano Alexandre Virginio & Ren, Junru & Wu, Shaomin, 2023. "A novel delay time modelling method for incorporating reuse actions in three-state single-component systems," Reliability Engineering and System Safety, Elsevier, vol. 234(C).
    13. Maxim Finkelstein & Mahmood Shafiee, 2017. "Preventive maintenance for systems with repairable minor failures," Journal of Risk and Reliability, , vol. 231(2), pages 101-108, April.
    14. Esmat Baghdadi & Mahmood Shafiee & Babakalli Alkali, 2022. "Upgrading Strategy, Warranty Policy and Pricing Decisions for Remanufactured Products Sold with Two-Dimensional Warranty," Sustainability, MDPI, vol. 14(12), pages 1-15, June.
    15. Wang, Yukun & Liu, Yiliu & Liu, Zixian & Li, Xiaopeng, 2017. "On reliability improvement program for second-hand products sold with a two-dimensional warranty," Reliability Engineering and System Safety, Elsevier, vol. 167(C), pages 452-463.
    16. Alqahtani, Ammar Y. & Gupta, Surendra M. & Nakashima, Kenichi, 2019. "Warranty and maintenance analysis of sensor embedded products using internet of things in industry 4.0," International Journal of Production Economics, Elsevier, vol. 208(C), pages 483-499.
    17. Mahmood Shafiee & Maxim Finkelstein, 2015. "A proactive group maintenance policy for continuously monitored deteriorating systems: Application to offshore wind turbines," Journal of Risk and Reliability, , vol. 229(5), pages 373-384, October.

    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. Wang, Yukun & Liu, Yiliu & Liu, Zixian & Li, Xiaopeng, 2017. "On reliability improvement program for second-hand products sold with a two-dimensional warranty," Reliability Engineering and System Safety, Elsevier, vol. 167(C), pages 452-463.
    2. 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.
    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. Wang, Xiaolin & Li, Lishuai & Xie, Min, 2020. "An unpunctual preventive maintenance policy under two-dimensional warranty," European Journal of Operational Research, Elsevier, vol. 282(1), pages 304-318.
    5. P-E Labeau & M-C Segovia, 2011. "Effective age models for imperfect maintenance," Journal of Risk and Reliability, , vol. 225(2), pages 117-130, June.
    6. Ait Mokhtar, El Hassene & Laggoune, Radouane & Chateauneuf, Alaa, 2023. "Imperfect maintenance modeling and assessment of repairable multi-component systems," Reliability Engineering and System Safety, Elsevier, vol. 234(C).
    7. Lo, Hui-Chiung & Yu, Rouh-Yun, 2013. "A study of quality management strategy for reused products," Reliability Engineering and System Safety, Elsevier, vol. 119(C), pages 172-177.
    8. Serguei Maximov & Consuelo de J. Cortes-Penagos, 2020. "A long-time asymptotic solution to the g-renewal equation for underlying distributions with nondecreasing hazard functions," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 92(2), pages 311-341, October.
    9. Ammar Y. Alqahtani & Surendra M. Gupta, 2017. "One-Dimensional Renewable Warranty Management within Sustainable Supply Chain," Resources, MDPI, vol. 6(2), pages 1-26, April.
    10. Tanwar, Monika & Rai, Rajiv N. & Bolia, Nomesh, 2014. "Imperfect repair modeling using Kijima type generalized renewal process," Reliability Engineering and System Safety, Elsevier, vol. 124(C), pages 24-31.
    11. Hamidi, Maryam & Liao, Haitao & Szidarovszky, Ferenc, 2016. "Non-cooperative and cooperative game-theoretic models for usage-based lease contracts," European Journal of Operational Research, Elsevier, vol. 255(1), pages 163-174.
    12. Dai, Anshu & Wei, Guanzhou & Wang, Dongfan & He, Zhen & He, Shuguang, 2021. "The opportunity study of PM strategy for second-hand products sold with a two-dimensional warranty," Reliability Engineering and System Safety, Elsevier, vol. 214(C).
    13. Esmat Baghdadi & Mahmood Shafiee & Babakalli Alkali, 2022. "Upgrading Strategy, Warranty Policy and Pricing Decisions for Remanufactured Products Sold with Two-Dimensional Warranty," Sustainability, MDPI, vol. 14(12), pages 1-15, June.
    14. Sidibe, I.B. & Khatab, A. & Diallo, C. & Kassambara, A., 2017. "Preventive maintenance optimization for a stochastically degrading system with a random initial age," Reliability Engineering and System Safety, Elsevier, vol. 159(C), pages 255-263.
    15. Beutner, Eric, 2023. "A review of effective age models and associated non- and semiparametric methods," Econometrics and Statistics, Elsevier, vol. 28(C), pages 105-119.
    16. Nguyen, Dinh Tuan & Dijoux, Yann & Fouladirad, Mitra, 2017. "Analytical properties of an imperfect repair model and application in preventive maintenance scheduling," European Journal of Operational Research, Elsevier, vol. 256(2), pages 439-453.
    17. 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.
    18. Wu, Shaomin, 2011. "Warranty claim analysis considering human factors," Reliability Engineering and System Safety, Elsevier, vol. 96(1), pages 131-138.
    19. Fu, Yuqiang & Wang, Jun, 2022. "Optimum periodic maintenance policy of repairable multi-component system with component reallocation and system overhaul," Reliability Engineering and System Safety, Elsevier, vol. 219(C).
    20. Toledo, Maria Luíza Guerra de & Freitas, Marta A. & Colosimo, Enrico A. & Gilardoni, Gustavo L., 2015. "ARA and ARI imperfect repair models: Estimation, goodness-of-fit and reliability prediction," Reliability Engineering and System Safety, Elsevier, vol. 140(C), pages 107-115.

    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:reensy:v:96:y:2011:i:2:p:286-291. 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: https://www.journals.elsevier.com/reliability-engineering-and-system-safety .

    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.