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Modeling and Analysis of Effective Ways for Improving the Reliability of Second-hand Products Sold with Warranty

Saidi-Mehrabad, Mohammad, Noorossana, Rassoul, Shafiee, Mahmood (2010) Modeling and Analysis of Effective Ways for Improving the Reliability of Second-hand Products Sold with Warranty. The International Journal of Advanced Manufacturing Technology, 46 . pp. 253-265. ISSN 0268-3768. E-ISSN 1433-3015. (doi:10.1007/s00170-009-2084-x) (KAR id:80811)


Often, customers are uncertain about the performance and durability of the used/second-hand products. The warranties play an important role in reassuring the buyer. Offering the warranty implies that the dealer incurs additional costs to service any claims made by the customers. Reducing warranty costs is an issue of great interest to dealers. One way of improving the reliability and reducing the warranty servicing cost for second-hand items is through actions such as overhaul and upgrade which are carried out by the dealer or a third party. Improving actions allow the dealer to offer better warranty terms and to sell the item at a higher price. This paper deals with two effective approaches (virtual age approach and screening test approach) to decide on the reliability improvement strategies for second-hand products sold under various warranty policies (failure-free, rebate warranty, and a combination of free replacement and lump sum). A numerical example illustrates that from a dealer’s point of view, it is beneficial to carry out an improvement action only if the reduction in the warranty servicing cost is greater than the extra cost incurred due to this improvement action.

Item Type: Article
DOI/Identification number: 10.1007/s00170-009-2084-x
Uncontrolled keywords: Free replacement; Reliability improvement; Second-hand product; Virtual age; Warranty policy
Subjects: T Technology > TA Engineering (General). Civil engineering (General) > TA165 Engineering instruments, meters etc. Industrial instrumentation
T Technology > TA Engineering (General). Civil engineering (General) > TA168 Systems engineering
T Technology > TA Engineering (General). Civil engineering (General) > TA401 Materials engineering and construction
T Technology > TJ Mechanical engineering and machinery
Divisions: Divisions > Division of Computing, Engineering and Mathematical Sciences > School of Engineering and Digital Arts
Depositing User: Mahmood Shafiee
Date Deposited: 10 Apr 2020 16:07 UTC
Last Modified: 16 Nov 2021 10:26 UTC
Resource URI: (The current URI for this page, for reference purposes)

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