Warranty and optimal upgrade strategy for used systems: An electric drill case study
Artikel i vetenskaplig tidskrift, 2012

Offering warranty for a second-hand item stimulates the sales of the item, but at the same time, it accumulates additional warranty servicing cost. This additional cost can be reduced through actions that improve the reliability of the item, such as overhaul and upgrade. An upgrade action brings the second-hand item to an improved functional state and it effectively reduces the age of the item. In this paper, we propose a model aiming to determine the optimal upgrade action strategies that achieve a sensible trade-off between the cost of an upgrade action and the reduction of the expected warranty cost due to this action. A practical application case on electric drills is used to illustrate our findings.



second-hand item



imperfect preventive maintenance

upgrade action


shock model

2nd-hand products


Mahmood Shafiee

Chalmers, Matematiska vetenskaper, Matematik

Göteborgs universitet

Stefanka Chukova

Victoria University of Wellington

M. Finkelstein

University of the Free State

Max-Plack-Institut fur demografische Forschung

Asia-Pacific Journal of Operational Research

0217-5959 (ISSN)

Vol. 29 4 Article Number: 1250023 -


Annan matematik