A new repair-replace strategy for items sold with a two-dimensional warranty

Authors:
B. P. Iskandar;D. N. P. Murthy;N. Jack
Affiliations:
Departemen Teknik Industri, Institut Teknologi Bandung, Jalan Ganesha 10, Bandung 40132, Indonesia;Department of Mechanical Engineering, The University of Queensland, St. Lucia 4072, Australia and Norwegian University of Science and Technology, Trondheim, Norway;School of Computing & Advanced Technologies, University of Abertay Dundee, Dundee DD1 1HG, Scotland, UK
Venue:
Computers and Operations Research
Year:
2005

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Abstract

For repairable items, the manufacturer has the option to either repair or replace a failed item that is returned under warranty. In this paper, we look at a new warranty servicing strategy for items sold with two-dimensional warranty where the failed item is replaced by a new one when it fails for the first time in a specified region of the warranty and all other failures are repaired minimally. The region is characterised by two parameters and we derive the optimal values for these to minimise the total expected warranty servicing cost. We compare the results with other repair-replace strategies reported in the literature.