Base and Extended One-Dimensional Warranties Analyses for Remanufactured Products

Overview & Synopsis

Uncertainties in the quality and reliability of remanufactured products from the buyer’s perspective might lead to a decision of not buying it. Remanufacturers must search for market mechanisms that provide assurance about the durability of remanufactured products. This paper considers a Remanufacturing-To-Order (RTO) system for sensor embedded products (SEPs). It presents an approach to determine how to predict base warranty (BW) and extended warranty (EW) periods for the remanufactured products using the sensor information about the age of each of the end-of-life (EOL) components on hand to meet the demand while minimizing the cost associated with warranty, maximizing manufacturer’s profit and finding an attractive price for the extended warranty. An example is considered to illustrate the implementation of the model.