Extended warranty of medical equipment subject to imperfect repairs: an approach based on generalized renewal process and Stackelberg game

Abstract

Article citation info: instance, it is estimated that an amount of US$ 24.83 billion will be annually spent in the medical equipment maintenance market by 2022 [20]. However, maintenance outsourcing for medical equipment is yet to be fully explored by current research (Cruz & Rincon [5]).Warranty policies define responsibilities for both parties: the OEM and hospital managers. Indeed, the OEM is responsible for repairing the devices' eventual failures related to problems of equipment design, manufacturing and/or quality. The customers in turn should make proper use of equipment, i.e., they must comply to the specifications defined by the OEM (Rahman & Chattopadhyay [32]).Given that, a new trend has been intensified by manufacturers, selling an additional, optional coverage, which begins after the expiration of the base warranty, called Extended Warranty (EW) (Murthy