Warranty cost analysis for products with a dormant state

Most building services products are installed while a building is constructed, but they are not operated until the building is commissioned. The warranty of the products may cover the time starting from their installation to the end of the warranty period. Prior to the commissioning of the building, the products are at a dormant mode (i.e., not operated) but protected by the warranty. For such products, both the usage intensity and the failure patterns are different from those with continuous usage intensity and failure patterns. This paper develops warranty cost models for repairable products with a dormant mode from both the manufacturer’s and buyer’s perspectives. Relationships between the failure patterns at the dormant mode and at the operational mode are also discussed. Numerical examples and sensitivity analysis are used to demonstrate the applicability of the methodology derived in the paper.     

Warranty cost analysis under continuous sales

The modeling and analysis of a variety of warranty policies and some related optimisation problems have been widely studied during the last decades. Recently, Blischke and Murthy proposed a new model for warranty servicing under continuous sales. However, we point out that there is a crucial mistake in their formulation, and provide a correct formulation. We illustrate the amounts of estimation errors using the numerical example of Blischke and Murthy.     

An Optimal Policy for Servicing Warranty

In this paper we study a policy for servicing items sold with warranty. We obtain the optimal policy to minimize the expected warranty cost per unit sold.     

Decision analysis as a replacement for cost/benefit analysis

Decision analysis has recently been employed to analyse public policy issues, and in contexts where cost/benefit analysis might equally well have been applied. In this paper we examine whether these two techniques are in competition, and if so, which is most fitted for public policy analysis. The intellectual origins of the two techniques are outlined, and different modes of interpretation are identified. The two techniques are compared on several different issues, including their handling of uncertainty, equity and conflicting objectives. It is argued that as an aid to decision-making the approach of decision analysis has advantages over cost/benefit analysis.     

A marginal cost analysis for prevetive replacement policies

Some well known preventive replacement policies are each characterized by a single parameter which governs the sequence of planned replacements. In this paper we define and compute for any one of these policies the marginal cost of a planned replacement in terms of the policy parameter. This function is used to obtain the equation of optimality, with respect to two common objective functions: the expected cost per unit time and the expected total discounted costs, and to investigate the existence of a unique finite solution. Moreover, the marginal cost notion provides reasoning to the mathematical results of the models and thereby clarifies the effect of the various components of the model on these results. This better insight into models is perhaps the most important benefit of a marginal cost analysis.     

Using data envelopment analysis for costing bank products

An important problem that many banks face is to provide satisfactory cost estimates for the variety of products and services they offer. Accurate product cost estimates can be used to support better product mix and pricing decisions. In this paper we present a method for providing efficient and reliable cost estimates of bank products at the branch level, based on the non-parametric benchmarking technique of Data Envelopment Analysis (DEA). Results from an empirical study undertaken in a banking environment to demonstrate the applicability of the method are also presented.     

Warranty servicing strategies to improve customer satisfaction

Customer satisfaction with a purchased product depends on itsperformance under warranty and during the remainder of its usefullife. Dissatisfaction with an item is important to a manufacturersince it can lead to the loss of potential customers throughthe negative word-of-mouth effect as well as existing customersswitching to a competitor. In this paper, we define satisfactionin terms of the likelihood of a customer not switching to adifferent manufacturer when a new item needs to be purchased. Manufacturers can use specific servicing strategies to reducewarranty costs and this topic has already been addressed inthe literature without considering the effect of customer dissatisfaction.In this paper, we propose particular strategies that will increasecustomer satisfaction and we discuss methods for obtaining theoptimal parameters of these strategies.     

Warranty and optimal redundancy with uncertain quality

The expected warranty servicing cost is critically dependent on the reliability of the product. One way of improving product reliability is through redundancy but this is achieved at the expense of increased manufacturing cost. Redundancy is worthwhile if the reduction in expected warranty servicing cost exceeds the increase in the manufacturing cost. This paper examines optimal strategies with quality uncertainty where nonconforming items have inferior performance characteristics relative to conforming ones. It also examines the effect of life testing on the optimal strategies.     

Optimal single machine scheduling of products with components and changeover cost

We consider the problem of scheduling products with components on a single machine, where changeovers incur fixed costs. The objective is to minimize the weighted sum of total flow time and changeover cost. We provide properties of optimal solutions and develop an explicit characterization of optimal sequences, while showing that this characterization has recurrent properties. Our structural results have interesting implications for practitioners, primarily that the structure of optimal sequences is robust to changes in demand.     

Possibility and cost in decision analysis

The thesis of this paper is that a practically relevant decision theory must be based on the concept of possibility. As the concept is interpreted here it covers all the obstacles the decision-maker is facing. In many situations the contemplation of possibility is quite as relevant as the usual concentration on utility and probability. There is a traditional economic concept which conforms to an emphasis on obstacles or possibility in decision-making: opportunity cost. The opportunity cost of a decision is the value of the highest valued possible decision which is inhibited as a result of the decision actually taken. However as opportunity cost is usually interpreted decisions are dichotomized as either possible or impossible to perform. It is argued in the paper that this dichotomization is not very realistic. In reality there must be allowed for a continuum of states between the plain impossibility and the complete possibility. This gradual view of possibility could be dealt with if the fuzzy set theory is used. In the paper it is shown how some relevant concepts regarding possibility could be based on fuzziness and how these concepts could be used to analyze practical situations. A method to deal simultaneously with possibility and probability is stated.     

Optimal production stopping time for perishable products with ramp-type quadratic demand dependent production and setup cost

A single item economic production quantity (EPQ) model is discussed to analyse the behaviour of the inventory level after it’s introduction to the market. It is assumed that demand is time dependent accelerated growth-effect of accelerated growth-steady type. Unlike the conventional EPQ models, which are restricted to general production cycle over the finite or infinite time horizon, we consider the production sale scenario of the very first production cycle for newly introduced perishable product. Shortage is not allowed. Set up cost of an order cycle depends on the total amount of inventory produced. The finite production rate is proportional to demand rate. Optimal production stopping time is determined to maximize total unit profit of the system. A numerical example is presented to illustrate the development of the model. Sensitivity analysis of the model is carried out.     

Warranty and optimal reliability improvement through product development

For products sold with warranty, the warranty servicing cost can be reduced by improving product reliability through a development process. However, this increases the unit manufacturing cost. Optimal development must achieve a trade-off between these two costs. The outcome of the development process is uncertain and needs to be taken into account in the determination of the optimal development effort. The paper develops a model where this uncertainty is taken into account.     

Tensor products and harmonic analysis

Mathematische Annalen -     

Marginal cost price rule for homogeneous cost functions

Mirman and Tauman (1982) show that axioms of cost sharing, additivity, rescaling invariance, monotonicity, and consistency uniquely determine a price rule on the class of continuously differentiable cost problems as the Aumann-Shapley price mechanism. Here we prove that standard versions of these axioms determine uniquely the marginal cost price rule on the class of homogeneous and convex cost functions, which are, in addition, continuously differentiable. This result persists even if the cost functons are not required to be convex. Received: August 2001     

考虑提供基础质保服务的供应链再制造定价策略研究

再制造产品对新产品需求存在互补与挤兑现象,商家为再制造产品提供基础质保服务刺激其需求的同时,也会使得新产品销量受阻.以一个制造商和一个零售商组成的两级供应链为对象,分别探讨制造商提供再制造与零售商提供再制造两种模式下的定价决策问题.研究结果表明:1)当再制造产品质量水平过低时,由于出售再制造产品需要承担高额的维修成本,因此为避免降低供应链总体收益不应该引入再制造策略;2)再制造产品故障率越高,为了对抗售后维修成本,商家制定的新产品与再制造产品间的均衡售价差异反而会越小;3)当再制造产品质量水平较低时,制造商(零售商)总能在另一方采用再制造策略的情形下受益.     

Practical extensions to a minimum cost flow model for level of repair analysis

The level of repair analysis (LORA) gives answers to three questions that are posed when deciding on how to maintain capital goods: (1) which components to repair upon failure and which to discard, (2) at which locations in the repair network to perform each type of repairs, and (3) at which locations in the network to deploy resources, such as test equipment. The goal is to achieve the lowest possible life cycle costs. Various models exist for the LORA problem. However, they tend to be restrictive in that specific business situations cannot be incorporated, such as having repair equipment with finite capacity or the occurrence of unsuccessful repairs or no-fault-founds. We discuss and model such practically relevant extensions to an existing minimum cost flow formulation for the LORA problem. In an extensive numerical experiment, we show that incorporating the model refinements leads to a substantial change in the costs in general. The repair strategy changes substantially only when incorporating finite resource capacities or a probability of unsuccessful repair that is decreasing with an increasing echelon level.     

Bundling retail products: Models and analysis

We consider the impact of bundling products on retail merchandising. We consider two broad classes of retail products: basic and fashion. For these product classes, we develop models to calculate the optimal bundle prices, order quantities, and profits under bundling. We use this analysis to establish conditions and insights under which bundling is profitable. Our analysis confirms that bundling profitability depends on individual product demands, bundling costs, and the nature of the relationship between the demands of the products to be bundled. We also provide detailed numerical examples.     

Adaptive mesh refinement for the control of cost and quality in finite element analysis

Adaptive strategies are a necessary tool to make finite element analysis applicable to engineering practice. In this paper, attention is restricted to mesh adaptivity. Traditionally, the most common mesh adaptive strategies for linear problems are used to reach a prescribed accuracy. This goal is best met with an h-adaptive scheme in combination with an error estimator. In an industrial context, the aim of the mechanical simulations in engineering design is not only to obtain greatest quality but more often a compromise between the desired quality and the computation cost (CPU time, storage, software, competence, human cost, computer used). In this paper, we propose the use of alternative mesh refinement criteria with an h-adaptive procedure for 3D elastic problems. The alternative mesh refinement criteria (MR) are based on: prescribed number of elements with maximum accuracy, prescribed CPU time with maximum accuracy and prescribed memory size with maximum accuracy. These adaptive strategies are based on a technique of error in constitutive relation (the process could be used with other error estimators) and an efficient adaptive technique which automatically takes into account the steep gradient areas. This work proposes a 3D method of adaptivity with the latest version of the INRIA automatic mesh generator GAMHIC3D.     

Models for products

This paper explores how models can support productive thinking. For us a model is a thing, a tool to help make sense of something. We restrict attention to specific models for whole-number multiplication, hence the wording of the title. They support evolving thinking in large measure through the ways their users redesign them. They assume new forms, come to be seen and understood in different ways. We show how work that learners do with models can help them to transform, not simply their understanding of key concepts, but also how they come to view themselves as thinkers and learners, as collaborators in a social process that their work and thinking help to constitute. We draw on recent research on core knowledge, especially by Carey, Spelke, and Tomasello, to clarify how models, as we view them here, can underpin specific actions that support emerging understanding.