Optimal burn-in for repairable products sold with a two-dimensional warranty

Abstract

Warranty data analyses reveal that products sold with two-dimensional warranties may have significant infant mortalities. To deal with this problem, this article proposes and studies a new burn-in modeling approach for repairable products sold with a two-dimensional warranty. More specifically, two types of failures are characterized-i.e., normal and defect failures-and performance and cost-based burn-in models are developed under the non-renewing free-repair warranty policy. The proposed models subsume the special cases of a one-dimensional warranty, allow different failure modes to have distinct accelerated relationships, and take consumer usage heterogeneity into consideration. Under mild assumptions, it is established that the optimal burn-in usage rate should be as high as possible, provided that no extraneous failure modes are introduced. Furthermore, It is shown that the optimal burn-in duration determined from the performance-based model is not shorter than that from the cost-based model. Numerical examples are used to demonstrate the benefits of burn-in. In addition, some practical implications from a sensitivity analysis are elaborated.

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

“…The main reason is due to the need for an accurate estimation of warranty cost for those systems as the warranty cost could be very high. When a complex system is treated as a 'single-component' system or a 'black box', the inner structure information is ignored (Wu et al, 2008;Ye et al, 2013). It is desirable to consider a different warranty policy for multi-component system when failure of several units instead of one unit results in the warranty cost (Bai and Pham, 2006;Scarf and Majid, 2011).…”

Warranty menu design for a two-dimensional warranty

“…The literature on the 2-D warranty focuses on failure modeling and warranty cost estimation under a base warranty and a given maintenance policy, e.g., Murthy et al [24]; Ye et al [39] and Gupta et al [8]. Some studies further optimized the warranty coverage and the maintenance setting by minimizing the servicing cost, e.g., Chen and Popova [3]; Huang et al [11] and Wang et al [33].…”

Optimal Upgrade Policy for Used Products Sold with Two‐dimensional Warranty

“…Su and Shen presented cost and profit models for two types of extended warranty policies with different corrective repair options. Considering two types of failures, namely, normal and defect failures, Ye et al proposed a new burn‐in modeling approach for repairable products sold with 2D warranty. Huang et al developed a 2D warranty model with reliability‐based preventive maintenance (PM) to maximize the manufacturer's profit.…”