A decision support model for warranty servicing of repairable items

Authors:
B. Madhu Rao
Affiliations:
Department of Applied Statistics and Operations Research, College of Business Administration, Bowling Green State University, Bowling Green, OH 43403, USA
Venue:
Computers and Operations Research
Year:
2011

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Abstract

This paper addresses the question of servicing warranties for repairable items. Each time a unit under warranty fails, the manufacturer is obliged to restore it to operating condition either by repairing it or by replacing it with a new unit. The decision to replace or repair depends on a variety of factors such as cost of immediate repair, age of the unit, the extent of usage, the condition of the unit, and the remaining warranty period. We consider products with phase type lifetime distributions, where the phase describes the condition of the unit, and develop a decision support system (DSS) for the repair/replace decisions in servicing the warranty using the criterion of expected cost of servicing the remaining warranty. A comprehensive example is presented to illustrate the DSS. Effectiveness of the proposed DSS is verified by simulation.