A general age-replacement model with minimal repair under renewing free-replacement warranty (Q2426532)

A general age-replacement model in which incorporates minimal repair, planned and unplanned replacement, is considered in this paper for products under a renewing free-replacement warranty (RFRW) policy. Under the RFRW policy, a product which fails within the warranty period is replaced by a new one with a full waranty. The paper analyzes the effects of a renewing free-replacement warranty on the optimal age-replacement for a product with an increasing failure rate. Under the general age-replacement model, if a product fails before the preventive replacement age T, it is either replaced by a new one (unplanned replacement) or it undergoes a minimal repair. Otherwise, the product is replaced preventively whenever it reaches age T (planned replacement). After a minimal repair, the product is operational but its failure rate (hazard) remains unchanged. Cost models are developed for both a warranted and a non-warranted product, and the corresponding optimal age replacement policies are derived. The comparisons between these optimal results show that the optimal replacement age should be adjusted toward the warranty period when a product is warranted with a renewing free-replacement warranty. Furthermore, the numerical examples also demonstrate that the adjustment of the optimal age-replacement model is necessary because the cost rate reduction could be more than \(51\%\). If the occurrence probability of an unplanned replacement \(p = 1\), then the model that developed in this paper will reduce to the case that the product is non-repairable. Most researches dealing with the maintenance replacement model assumed that the mean time to repair is negligible in front of the mean time between failures. However, if the minimal repair could not be done instantaneously, then the duration time of a repair action as well as the associated costs should be considered and incorporated into the model. Once the repair time cannot be neglected, then the expected downtime as well as cost due to minimal repair can be determined, and the optimal preventive replacement age can be obtained based on an alternative criterion of optimality-availability or cost effectiveness. It is worthy to point out that product warranty is an important factor in deriving an optimal preventive maintenance model. And the renewing free-replacement warranty is a special type of warranty policy, where it creates additional costs and heavy responsibilities to the seller, however, even so it is still an excellent competitive strategy for promoting a product in the marketplace, and for attracting consumers. Practitioners should take various product warranties into account in making maintenance decisions. Similar analysis to the article presented here can be further conducted for various combinations of product warranty strategies (e.g., non-renewing or rebate warranty) and maintenance models (e.g., block-or sequential replacement) to help practitioners make better decisions.