Optimal preventive maintenance strategy for repairable items under two-dimensional warranty

For repairable items under the two-dimensional warranty, the manufacturer expenses warranty costs for rectifying the failures occurring over the warranty coverage. Preventive maintenance actions reduce the occurrence intensity of item failures, and hence the warranty cost resulted from corrective maintenance, but bring additional preventive maintenance cost. In this paper, we investigate a periodic and imperfect preventive maintenance strategy for an item covered by a fixed and combined base warranty and extended warranty region from the manufacturer׳s perspective. After the base warranty expires, the buyer purchases an extended warranty service contract from the same manufacturer for extra protection. Over the whole warranty coverage, the item failures are minimally repaired by the manufacturer at no cost to the buyer. The effect of preventive maintenance action is characterized by reducing the item׳s failure intensity proportionally to the maintenance degree at each preventive maintenance action. Then a mathematical model is proposed to derive the optimal preventive maintenance strategy so as to minimize the total expected warranty servicing cost to the manufacturer. A numerical example is presented to illustrate the application of the proposed model and evaluate the impact of different model parameters on the optimal solutions and the corresponding warranty servicing costs.