Optimising burn-in procedure and warranty policy in lifecycle costing

Abstract

In this paper, an optimization model is developed to investigate the optimal burn-in time and warranty length of a product from a manufacturer's perspective. It is assumed that the cost of a minimal repair to the component which fails at age t is a continuous non-decreasing function of t. Out-of-warranty, if the product fails before its useful life limit, it causes customer dissatisfaction and incurs a penalty cost for the manufacturer. The properties of the optimal burn-in time and optimal warranty policy are also given. We provide a numerical example to illustrate our results. A sensitivity analysis is conducted to evaluate the effect of model parameters on the optimal solution.

A methodology for design for warranty with focus on reliability and warranty policies

“…In the literature, the optimization of warranty is carried out in which objective functions for optimization are the minimization of the expected warranty cost and price, maximization of the expected profit per product and market share, improvement of reliability (Mitra and Patankar, 1988, 1997; Yun, 1997; Liu et al , 2006; Lu and Chiang, 2008; Wu et al , 2009; Saidi‐Mehrabad et al , 2010; Shafiee et al , 2011; Shafiee and Zuo, 2011; Park and Pham, 2012; Faridimehr and Niaki, 2012). The most commonly used constraints in the literature are related to warranty reserves and life cycle costs (Kleyner and Sandborn, 2008; Mitra and Patankar, 1990; Painton and Campbell, 1995).…”