Optimal price and pro rata decisions for combined warranty policies with different repair options

Timothy I. Matis, Raja Jayaraman, Alagar Rangan

Research output: Contribution to journalArticle

22 Scopus citations

Abstract

A repairable product under a non-renewing combined warranty policy that is subject to a displaced log-linear demand function of the product's price and pro rata period length is considered. Expressions for the manufacturer's long-run average profit per unit time under replacement, minimal and general repair options are obtained. In addition, expressions for the stationary points and second-order conditions of the profit function are presented. Numerical illustrations that demonstrate optimal product pricing, pro rata length determination, and repair option selection to maximize the manufacturers, profit are given.

Original languageEnglish
Pages (from-to)984-991
Number of pages8
JournalIIE Transactions (Institute of Industrial Engineers)
Volume40
Issue number10
DOIs
StatePublished - 2008

Keywords

  • Combined warranty
  • General repair
  • Minimal repair
  • Pro rata warranty

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