OPTIMAL PRODUCTION RUN-LENGTH AND WARRANTY PERIOD FOR ITEMS SOLD WITH REBATE COMBINATION WARRANTY

摘要

This paper considers a decision model for a production system in which the demandof the product is influenced by the warranty period offered to the customer. The production process is not perfect; it may shift from an in-control state to an out-of-control state at any random time where some non-conforming items may be produced. The proposed model is formulated under rebate combination warranty policy, assuming that the process shift distribution is arbitrary and product defects are detectable only through time testing for a significant period of time. The expected pre-sale and post-sale costs per unit item is taken as the criterion for optimality. Some characteristics of the model are studied analytically. Optimal decisions are also derived in a numerical example.