Warranty Policy for Repairable Items with Repair Service and Refund Based on Lemon Law  
Author Minjae Park


Co-Author(s) Ki Mun Jung; Dong Ho Park


Abstract In this paper, we develop a cost model under twodimensional warranty with age and usage based on lemon law and determine decision variables such as optimal preventive maintenance cycle for age and usage perspectives and optimal length of warranty period. We propose a two-dimensional maintenance strategy, under which the item is preventively maintained according to a specified age interval or usage interval, whichever occurs first. A periodic preventive maintenance service is considered which can be implemented to reduce the repair cost of a repairable product under warranty. The optimization of imperfect preventive maintenance for repairable items is investigated from the manufacturer’s perspective by taking into account the moments of customers purchasing two-dimensional warranty. During the warranty period, preventive maintenance service and refund is conducted to reduce the degradation rate which the product is in operation and to increase customers’ satisfaction. We consider minimal repair service, refund, preventive maintenance for the warranty services. The numerical application is implemented using the proposed approach and examples are discussed to exemplify the applicability of the methodologies derived in this paper.


Keywords Cost model, Expected cost rate, Lemon law, Optimal replacement age, Refund, Repair time threshold
    Article #:  RQD25-200
Proceedings of 25th ISSAT International Conference on Reliability & Quality in Design
August 1-3, 2019 - Las Vegas, NV, U.S.A.