Quality control through lot sizing for items sold with warranty

Coordinated procurement/inspection and production model under inspection errors

“…Porteus (1986) found that a smaller lot size than the classical EPQ gives a minimal total cost, which includes setup cost, inventory holding cost and the nonconforming cost. Based on the Porteus (1986) model, Djamaludin, Murthy, and Wilson (1994) distinguished the nonconforming costs for products between the products that are sold before and after the change of state to a market where a free repair warranty policy is provided. Extensions to the model of Djamaludin et al (1994) can be found in Yeh and Lo (1998), Yeh, Ho, and Tseng (2000) and Wang and Sheu (2003), where, for example, Wang and Sheu (2003) considered the timing of the process shift from an in-control state to an out-of-control state, which follows a general distribution.…”

“…Based on the Porteus (1986) model, Djamaludin, Murthy, and Wilson (1994) distinguished the nonconforming costs for products between the products that are sold before and after the change of state to a market where a free repair warranty policy is provided. Extensions to the model of Djamaludin et al (1994) can be found in Yeh and Lo (1998), Yeh, Ho, and Tseng (2000) and Wang and Sheu (2003), where, for example, Wang and Sheu (2003) considered the timing of the process shift from an in-control state to an out-of-control state, which follows a general distribution. Instead of using a smaller lot size to control the number of nonconforming outputs as studied by Porteus (1986), Raz, Herer, and Grosfeld-Nir (2000) proposed an economical off-line inspection and disposition policy to dwindle or eliminate the nonconforming outputs, where the outputs are produced from an imperfect process that has a geometric shift distribution.…”

Warranty Economic Decision Models: A Summary and Some Suggested Directions for Future Research

“…A comprehensive study by Fisk (1973) links various cause-and-e ect relationships between manufacturers, customers, retailers, and government in dealing with warranty problems. The quality control and reliability aspects in the context of warranties have been discussed by Nguyen and Murthy (1988b), Djamaludin (1993), and Djamaludin et al (1994), and optimal product development programs have been proposed by Murthy and Nguyen (1987).…”

“…Therefore, to reduce the risk it is ÿrst necessary to have a good understanding of the product performance and processes necessary to achieve su cient quality and reliability to meet or exceed the service and lifetime expectations for given policies. This includes managing to ensure that proper production processes, materials, and workmanship are in place for manufactured products (see Patterson 1987, Djamaludin 1993, Djamaludin et al 1994, Sahin 1993. Balaban (1976) and Balaban and Meth (1978) describe methods to control risk for RIW policies.…”

Coordinated Inventory Planning for New and Old Products Under Warranty

“…( [14]) and Wang and Sheu ( [13]) study other extensions of this scenario to find the optimal lot size taking into account long run production inventory and warranty costs.…”