OPTIMAL PREVENTIVE WARRANTY POLICY FOR REPAIRABLE PRODUCTS WITH AGE-DEPENDENT MAINTENANCE COSTS

ABSTRACT

This study investigates preventive-maintenance warranty (PMW) policies for repairable products with age-dependent maintenance costs. The primary role of warranty is to offer post-sale remedy for consumers when a product fails to fulfill its intended performance during a warranty period. For repairable products, the most commonly used warranty policy is the minimal repair warranty. To reduce product failures, preventive maintenance is widely adopted in practice, especially when the product is complex and/or expensive. For most PMW policies discussed in the literature, there is a basic assumption that the cost of each maintenance action is constant. However, the cost of a maintenance action is varied as the age of repairable products increases in general. Therefore, a general cost model for repairable products with age-dependent maintenance costs is established in this study to derive the optimal PMW policy such that the expected total warranty cost is minimized.

Keywords:

• warranty policies
• replacement
• preventive maintenance