A decision model for adopting an extended warranty under different maintenance policies

Bouguerra, Soumaya; Chelbi, Anis; Rezg, Nidhal

doi:10.1016/j.ijpe.2011.10.022

Cited by 93 publications

(40 citation statements)

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“…In academic research, warranty length is a common research theme (e.g., Chien 2005Chien , 2012Jack and Murthy 2006;Lin et al, 2009;Chen, et al, 2010;Wu and Longhurst, 2011;Bouguerra, et al, 2012). Also, research on warranty often sets up two types of warranty, base warranty and extended warranty (e.g., Wu and Longhurst 2011;Bouguerra, et al, 2012), as we assume two types of after-sales service plans, base and optional services. However, in this paper, the meaning of after-sales service is not limited to warranty support, as including all types of service available after the purchase of a product (a free warranty, a telephone or e-mail helpdesk, training sessions, and tutorial materials) is important.…”

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confidence: 99%

After-sales service competition in a supply chain: Does uncertainty affect the conflict between profit maximization and customer satisfaction?

Kurata

Nam

2013

International Journal of Production Economics

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After-sales services are a key strategic tool in the durable consumer product market. They allow a manufacturer and a retailer to capture more sales and profit. Less obvious, however, is how the uncertainty of the customer's needs for after-sales services influences after-sales service decisions. As an extension of Kurata and Nam's (2010) work, in this paper we explore the effect of uncertainty on after-sales service decisions by comparing several information structures in a two-stage supply chain. The model presented in this paper demonstrates that uncertainty may temporally alleviate the discrepancy between customers' optimal service level and a firm's service decisions based on maximizing profits (referred to here as accidental outperformance). However, ultimately, uncertainty will never improve supply chain performance. We determine probabilities that such accidental outperformance may mislead the firm into making erroneous after-sales service decisions due to misunderstandings regarding uncertainty. In addition, our analysis shows that a firm's effort to provide efficient service operations will increase the chance of accidental outperformance. Based on the analytical results, we also provide several practical insights for business. 3 IntroductionAfter-sales service is a strategic tool in the durable consumer product market used to gain more sales, revenue, and profit (e.g., Cohen et al., 2006;Cohen and Kunreuther, 2007). Research on after-sales service covers maintenance and replacement (e.g., Bensoussan and Sethi, 2007), repair services (Amini et al., 2005), spare parts supply (e.g., Thonemann et al., 2002), warranties (e.g., Chukova et al. 2004;Balachandran and Radhakrishnan, 2005;Chu and Chintagunta, 2009), service guarantees (e.g., Hart, 1988;Baker and Collier 2005), customer relationships (e.g., Gupta and Lehmann, 2007), and competition between new and remanufactured products (Wu, 2012) among other things. Another critical issue in supply chain management is the ability to cope with uncertainty in business environments. Uncertainty makes supply chain management difficult, and managing uncertainty is among the most critical supply chain challenges (Simchi-Levi, et al., 2008). In marketing, understanding the target market's needs and wants is a major concern, as often even customers are unaware of their real needs.Kurata and Nam (2010) studied after-sales service competition, considering profit maximization and customer satisfaction while using the deterministic model in which firms are assumed to understand customers' needs perfectly. However, this assumption has a limitation. In reality, customers' real preferences for services are unknown to businesses. Firms often estimate customers' real needs by conducting market research. Based on the estimations, the firm makes managerial decisions, including those aimed at ensuring the most profitable after-sales service plan. In fact, marketing researchers claim that understanding what the target segment prefers the most is important (Aaker et al., 199...

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confidence: 99%

After-sales service competition in a supply chain: Does uncertainty affect the conflict between profit maximization and customer satisfaction?

Kurata

Nam

2013

International Journal of Production Economics

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“…Warranty policies are extensively studied in the literature, but most of them are based on assumptions such as \warranted items being repaired minimally or being repaired minimally which are very much concepts widely used in reliability and maintenance engineering, see [60,61], for example. As mentioned above, different from base warranty, extended warranty is purchased separately and voluntarily by the buyer as a service contract.…”

Section: Policy Pricingmentioning

confidence: 99%

An Overview of Approaches to Insurance Data Analysis and Suggestions for Warranty Data Analysis

Luo¹,

Wu²

2016

ENG

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Warranty shares similarities with insurance in many aspects. Research on insurance data analysis has attracted much more attention than on warranty data analysis. This paper provides a general comparison between warranty and insurance in terms of their coverages, policies and data collection. It then reviews existing approaches to insurance data analysis with regard to modelling of claim frequency, modelling of claim size and policy pricing. Some recent patents relating statistical models are also discussed. The paper concludes with suggestions for improving warranty data analysis.

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“…Detailed studies can be found in Sheu and Chien (2005), Bouguerra et al (2012), Park et al (2013), Shafiee and Chukova (2013), Xie and Liao (2013). Specifically, cost modeling under renewing free-replacement policy (RFRW) is extensively studied in literature (Yeh et al, 2005;Chien, 2008;Wu and Xie, 2008;Vahdani et al, 2011;Darghouth et al, 2012;Chien, 2012).…”

Section: Accepted Manuscriptmentioning

confidence: 99%

Cost analysis for multi-component system with failure interaction under renewing free-replacement warranty

Liu

Wu²,

Xie

2015

European Journal of Operational Research

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A decision model for adopting an extended warranty under different maintenance policies

Cited by 93 publications

References 20 publications

After-sales service competition in a supply chain: Does uncertainty affect the conflict between profit maximization and customer satisfaction?

After-sales service competition in a supply chain: Does uncertainty affect the conflict between profit maximization and customer satisfaction?

An Overview of Approaches to Insurance Data Analysis and Suggestions for Warranty Data Analysis

Cost analysis for multi-component system with failure interaction under renewing free-replacement warranty

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