Integration of marketing and maintenance decisions in two-dimensional warranty contracts under a win-win strategy for two transaction sides

ABSTRACT

This study proposes a mathematical model to simultaneous decision-making about the marketing and maintenance decisions. Also, a win–win strategy for manufacturer and buyer is established under the two-dimensional basic and extended warranty coverages. The product demand and the extended warranty demand are, respectively, considered as functions of the basic and extended warranty regions. To illustrate the advantages of the model, three comparative studies are conducted. The first one approves the fact that concurrent optimization from the perspective of two transaction sides leads to better results compared to the single-objective optimization from each of views mentioned above. The second comparison shows that providing extended warranty benefits both the transaction sides. The third comparison proves that the implementation of a PM program throughout the warranty region has a significant effect on both the imposed cost on the customer during the post-warranty period and the manufacturer’s profit. Finally, a sensitivity analysis is conducted on some parameters to extend insights into the impact of them on the objective function.

KEYWORDS:

• Win-win strategy
• two-dimensional warranty
• product demand
• extended warranty demand
• preventive maintenance

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Ali Salmasnia

Ali Salmasnia is currently an Associate Professor in University of Qom, Qom, Iran. His research interests include quality engineering, reliability, applied multivariate statistics and multi-criterion decision making. He is the author or co-author of various papers published in Computers & Industrial Engineering, Journal of Manufacturing Systems, Applied Soft Computing, Neurocomputing, Applied Mathematical Modelling, Expert Systems with Applications, Applied Stochastic Models in Business and Industry, IEEE Transactions on Engineering Management, International Journal of Information Technology and Decision Making, TOP, Quality and Reliability Engineering International, Communications in Statistics-Simulation and Computation, Operational Research, International Journal of Advanced Manufacturing Technology, and Scientia Iranica. Email: [email protected], Tel:[phone]

Maryam Baratian

is a MS student in department of Industrial Engineering, Faculty of Engineering, University of Qom. Her current research interests include maintenance, warranty and multi-criterion decision making. She is the author of a paper published in Applied Stochastic Models in Business and Industry. Email: [email protected], Tel: [phone]