Article ID: | iaor20071121 |
Country: | Netherlands |
Volume: | 44 |
Issue: | 11/12 |
Start Page Number: | 1133 |
End Page Number: | 1143 |
Publication Date: | Dec 2006 |
Journal: | Mathematical and Computer Modelling |
Authors: | Chukova S., Johnston M.R. |
Keywords: | warranty |
For repairable products, the warrantor has options in choosing the degree of repair applied to an item that has failed within the warranty period. We focus on a particular warranty repair strategy, related to the degree of the warranty repair, for non-renewing, two-dimensional, free of charge to the consumer warranty policy. We consider a rectangular warranty region and divide it into three disjoint subregions, so that each of these subregions has a preassigned degree of repair for a faulty item. Our main goal is to determine the subregions, so that the associated expected warranty servicing cost per item sold is minimised. A comparison between our strategy and previously studied, more restrictive, ones is provided.