TY - JOUR
T1 - Cost analysis of a piece-wise renewing free replacement warranty policy
AU - Wang, Xiaolin
AU - He, Kangzhe
AU - He, Zhen
AU - Li, Lishuai
AU - Xie, Min
N1 - Funding Information:
This work was supported by the National Natural Science Foundation of China (Grant Nos. 71601166 , 71532008 ) and also by the Research Grants Council of Hong Kong under Theme-based Research Fund (Grant No. T32-101/15-R ) and General Research Fund (Grant Nos. CityU 11203815 , CityU 11203519 ). The authors are grateful to the three anonymous reviewers for their helpful comments and suggestions on this paper.
Publisher Copyright:
© 2019 Elsevier Ltd
Copyright:
Copyright 2019 Elsevier B.V., All rights reserved.
PY - 2019/9
Y1 - 2019/9
N2 - Nowadays, fierce competition and increasing customer requirements force manufacturers to continuously provide better after-sales services and supports. One such kind of after-sales services is product warranty which has been offered for almost all products in today's market. In this paper, we study a new warranty policy, called piece-wise renewing free replacement warranty. Under this policy, the whole warranty period is divided into two sub-periods and once an item fails in a specific sub-period, it will be replaced by a new identical one and the warranty period is fully or partially renewed. The expected warranty cost and warranty cycle of this policy are derived from the manufacturer's perspective. The proposed model is then modified by involving three sub-periods and a failure limit, respectively. In the latter scenario, when the number of item failures over a warranty cycle exceeds a pre-specified threshold, the manufacturer has to refund the item's purchase price, and consequently the warranty ceases. A real-world case study is presented using warranty data of a battery manufacturer. It is found that for a given warranty period, the piece-wise renewing free replacement policy has a better performance than traditional fully renewing policy, in terms of expected warranty cost, warranty cycle, and cost rate.
AB - Nowadays, fierce competition and increasing customer requirements force manufacturers to continuously provide better after-sales services and supports. One such kind of after-sales services is product warranty which has been offered for almost all products in today's market. In this paper, we study a new warranty policy, called piece-wise renewing free replacement warranty. Under this policy, the whole warranty period is divided into two sub-periods and once an item fails in a specific sub-period, it will be replaced by a new identical one and the warranty period is fully or partially renewed. The expected warranty cost and warranty cycle of this policy are derived from the manufacturer's perspective. The proposed model is then modified by involving three sub-periods and a failure limit, respectively. In the latter scenario, when the number of item failures over a warranty cycle exceeds a pre-specified threshold, the manufacturer has to refund the item's purchase price, and consequently the warranty ceases. A real-world case study is presented using warranty data of a battery manufacturer. It is found that for a given warranty period, the piece-wise renewing free replacement policy has a better performance than traditional fully renewing policy, in terms of expected warranty cost, warranty cycle, and cost rate.
KW - Failure limit
KW - Free replacement
KW - Piece-wise renewing policy
KW - Warranty
KW - Warranty data analysis
UR - http://www.scopus.com/inward/record.url?scp=85069563116&partnerID=8YFLogxK
U2 - 10.1016/j.cie.2019.07.015
DO - 10.1016/j.cie.2019.07.015
M3 - Journal article
AN - SCOPUS:85069563116
SN - 0360-8352
VL - 135
SP - 1047
EP - 1062
JO - Computers and Industrial Engineering
JF - Computers and Industrial Engineering
ER -