Renewable warranty policy for multiple-failure-mode product considering different maintenance options

Warranty is an obligation attached to products that requires manufacturers to provide compensation for customers when the products fail to perform their pre-specified functions during a specified period [20]. Since product warranty can be a powerful incentive in selling a product and a useful way to protect customer from product quality defects, it plays an increasingly important role in commercial transactions and has obtained increasing attention from the manufacturers as well as the customers recently. According to Murthy and Blischke [5], warranty polices can be divided into two classes, i.e. renewing warranty and non-renewing warranty. In a renewing warranty policy, whenever an item fails under warranty, it is replaced by a new item with a new-starting warranty. In contrast, in the case of a nonrenewing policy, replacement of a failed item doesn’t alter the original warranty [6]. The warranty period for renewing policies begins anew with each replacement, while the replacement item for non-renewing policies will be covered for the remaining time of the item it replaced. Nowadays, most product warranties are non-renewing. But for some high-reliability-required and high-safety-required products (like expensive aviation products), the maintenance in warranty period is considered to be perfect such that the failed product is replaced by a new one. Then the customers are more preferred to choose the renewing warranty policy. However, the period of renewing warranty normally gets longer compared to the non-renewing warranty. Then reducing the warranty servicing cost and improving the product performance Xinyue Li Yunxian JiA Peng WAng Jianmin ZhAo