Article ID: | iaor20012679 |
Country: | South Korea |
Volume: | 25 |
Issue: | 3 |
Start Page Number: | 41 |
End Page Number: | 48 |
Publication Date: | Sep 2000 |
Journal: | Journal of the Korean ORMS Society |
Authors: | Paik Chun-Hyun, Kim Ho-Gyun, Cho Hyung-Soo |
Keywords: | warranty |
We consider the question of servicing warranties for repairable items. During the warranty period, each time an item fails the manufacturer has the obligation to restore the item to operational condition either by repairing the item or by replacing it by a new item. In this paper, we consider a warranty policy for making this decision based on the condition of the failed item. For products with phase-type lifetime distributions where the phases represent the condition of the item, we develop algorithms to determine the expected cost of servicing a warranty and use it in making the repair/replacement decision. Illustrative numerical examples are presented.