Modeling flexible two-dimensional warranty contracts for used products considering reliability improvement actions

Chun Su, Xiaolin Wang

Research output: Journal article publicationJournal articleAcademic researchpeer-review

10 Citations (Scopus)

Abstract

In this article, a new pre-sale reliability improvement model is proposed for repairable used products sold with a two-dimensional free repair warranty policy. Using bivariate failure modeling framework, this model can describe the effect of reliability improvement action on the past age and past usage of a used product separately. Under the two-dimensional free repair warranty policy, product failures within the warranty coverage are rectified minimally by the dealer at no cost to new buyers. The optimal reliability improvement policy is determined to minimize the total expected servicing cost per unit sale from the dealer's perspective. Moreover, a four-step approach is developed to design flexible warranty contracts with optimized reliability improvement policies for used products. Numerical example and sensitivity analysis are provided to demonstrate the effectiveness of the proposed model and approach.

Original languageEnglish
Pages (from-to)237-247
Number of pages11
JournalProceedings of the Institution of Mechanical Engineers, Part O: Journal of Risk and Reliability
Volume230
Issue number2
DOIs
Publication statusPublished - Apr 2016

Keywords

  • bivariate failure modeling
  • flexible warranty
  • reliability improvement
  • two-dimensional warranty
  • Used products

ASJC Scopus subject areas

  • Safety, Risk, Reliability and Quality

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