Optimising Age-Replacement and Extended Non-Renewing Warranty Policies in Lifecycle Costing

Wu, Shaomin and Longhurst, Phil (2011) Optimising Age-Replacement and Extended Non-Renewing Warranty Policies in Lifecycle Costing. International Journal of Production Economics, 130 (2). pp. 262-267. ISSN 0925-5273. (Full text available)

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http://dx.doi.org/10.1016/j.ijpe.2011.01.007

Abstract

This paper analyses the life cycle cost of equipment protected by both base and extended warranty policies from a consumer's perspective. We assume that the equipment has two types of failure: minor and catastrophic. A minor failure can be corrected with minimal repair whereas a catastrophic failure can only be removed by a replacement. It is assumed that equipment is maintained at no charge to the consumer during the warranty period, whereas the consumer is fully charged for any maintenance on failures after the extended warranty expires. We formulate the expected life cycle cost of the equipment under a general failure time distribution, and then for special cases we prove that the optimal replacement and extended warranty policies exists where the expected life cycle cost per unit time is minimised. This is examined with numerical examples. © 2011 Elsevier B.V. All rights reserved.

Item Type: Article
Additional information: Unmapped bibliographic data: PY - 2011/// [EPrints field already has value set] AD - School of Applied Sciences, Cranfield University, Bedfordshire MK43 0AL, United Kingdom [Field not mapped to EPrints] JA - Int J Prod Econ [Field not mapped to EPrints]
Uncontrolled keywords: Life cycle cost, Maintenance policy, Minimal repair, Opportunity-based replacement, Warranty policy, Lifecycle costs, Maintenance policy, Minimal repair, Opportunity-based replacement, Warranty policy, Costs, Equipment, Life cycle, Optimization, Planning, Repair, Cost benefit analysis
Subjects: H Social Sciences
H Social Sciences > HA Statistics > HA33 Management Science
Divisions: Faculties > Social Sciences > Kent Business School
Faculties > Social Sciences > Kent Business School > Management Science
Depositing User: Shaomin Wu
Date Deposited: 26 Oct 2012 15:41
Last Modified: 17 Apr 2014 09:22
Resource URI: http://kar.kent.ac.uk/id/eprint/32000 (The current URI for this page, for reference purposes)
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