Warranty Matching in a Consumer Electronics Closed-Loop Supply Chain

Problem definition : We examine a dynamic assignment problem faced by large wireless service provider (WSP) that is Fortune 100 company. This company manages two warranties: (i) customer warranty the WSP offers its customers and (ii) an original equipment manufacturer (OEM) OEMs offer WSP. The uses devices refurbished OEM as replacement devices, hence their operation closed-loop supply chain. Depending on uses, warranties might become misaligned for customer-device pairs, potentially incurring cost Academic/practical relevance identify, model, analyze new emerges in this setting called matching problem. introduce class of policies, farsighted which can perform better than myopic policies. also propose heuristic policy, sampling leads to near-optimal assignment. Our model results are motivated real-world problem, our theory-guided policies be used practice; we validate using data from industrial partner. Methodology formulate dynamically assigning discrete-time stochastic programming Because suffers curse dimensionality, set reasonable classes Results performance metric use given policy average time device under uncovered warranty. show reduce expected number out-of-OEM-warranty returns more 75% comparison with partner’s current policy. provide distribution-free bounds random assignment, proxy WSP’s Managerial implications indicate that, chains, being completely myopic. Also, effective balancing short-term long-term costs simple effective, illustrated describe how depend size length inventory buildup.