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

Wu, Shaomin, 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. (doi:10.1016/j.ijpe.2011.01.007) (KAR id:32000)

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
DOI/Identification number: 10.1016/j.ijpe.2011.01.007
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: Divisions > Kent Business School - Division > Department of Analytics, Operations and Systems
Depositing User: Shaomin Wu
Date Deposited: 26 Oct 2012 15:41 UTC
Last Modified: 16 Nov 2021 10:09 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/32000 (The current URI for this page, for reference purposes)

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