A two-dimensional warranty servicing strategy based on reduction in product failure intensity

The cost of servicing a warranty depends, amongst other factors, on the type of repair performed under warranty. Although ‘‘all minimal repair’’ and ‘‘all replacement’’ policies are easy to implement and analyze, they are not always feasible and/or practical. Having a combination of different types of repair often leads to lower warranty servicing costs. In this article, to reduce the warranty servicing cost, we study a servicing strategy that involves performing imperfect repairs in place of some of the minimal repairs of an ‘‘all minimal repair’’ strategy; the effect of an imperfect repair is characterized by a drop in the conditional intensity function of the failure process. We consider both fixed and random degrees of repair. For a given type of product, we partition the warranty region so that the expected total warranty servicing cost is minimized. We provide a numerical illustration and a comparison with previously-studied repair–replacement strategies. © 2011 Elsevier Ltd. All rights reserved.