Warranty cost analysis for deteriorating systems under varying environments

Abstract

In many environments, avoiding system failures during operation is crucial, as it may have costly and/or safety related implications. In such situations reliability is a key word right from the production of consumer goods to the launching of space vehicles. It is of special interest for a reliability analyst, therefore, to study various maintenance policies which reduce the operating cost and the risk of a catastrophic breakdown. As warranty is effectively a reliability guarantee, the objective of this thesis is to make a comprehensive stochastic analysis of optimal maintenance and replacement strategies including warranty for deteriorating systems. Secondly, alternating quasi-renewal processes are used to model stochastically deteriorating systems featuring the degree of repair as a decision variable. In the present scenario, customers are attracted by longer warranties, and, hence the manufacturers offer them to stimulate sales. Most of the products are sold with various types of warranty (Free replacement warranty, Pro-rata warranty, Extended warranty, Renewing warranty etc.), of which, extended and renewing warranties are gaining prominence. In view of this, the thesis puts forward an extended warranty model with a warranty option of two policies and the renewing warranty has been considered in the analysis to obtain analytic expressions for the replacement time distribution. The results so obtained tend to give a managerial insight to the decision maker. The first part of this thesis analyzes new products, while the last part of the thesis concentrates on modelling warranty policies for second-hand products, as the increasing globalization has paved the way for markets for second-hand products. Thus, the thesis contributes towards the incorporation of preventive repair and the notion of improved repair, including one and twodimensional warranty for new and used products under varying environments. newline