Optimal repair-cost limit for a consumer following expiry of a warranty

This paper develops a methodology for obtaining the optimal repair-cost limit for the repair–replace decision that a consumer faces on the expiry of a product warranty, where the product has been minimally repaired on failure during the warranty. Three cases are considered: (i) an exponentially distributed time to failure with an arbitrary repair-cost distribution, (ii) an exponentially distributed time to failure with a uniform repair-cost distribution, and (iii) a Weibull-distributed time to failure with a beta-distributed repair cost. Numerical optimizations are performed for the third case, and conclusions drawn as to the sensitivity of the optimal repair-cost limit on the parameter values of the distributions involved.