Evaluating two-dimensional warranty policies for remanufactured products

Jnl Remanufactur (2017) 7:19–47 DOI 10.1007/s13243-017-0032-8 RESEARCH Evaluating two-dimensional warranty policies for remanufactured products Ammar Y. Alqahtani 1 & Surendra M. Gupta 2 Received: 6 March 2017 / Accepted: 28 April 2017 / Published online: 10 July 2017 # Springer Science+Business Media Dordrecht 2017 Abstract The modern world is experiencing an unprecedented pace of technological change. The introduction of new technological products encourages consumers to trade in old products for new so that they can keep up with the latest in technology. One of the consequences of this rapid change in technology is that product life cycles are very short and there is an abundance of old technology products that need to be disposed of, but this is happening at a time when the earth of running out of natural resources and suitable landfill areas. Remanufactured products are very popular with consumers due to their appeal to offer latest technology with lower prices compared to brand new products. The quality of a remanufactured product induces hesitation for many consumers, in regards to its efficacy and reliability. Therefore, the users are unsure if remanufactured products will have the capacity to render the same expected performance as that of a new device. This uncertainty regarding a remanufactured product could lead the consumer to make a determination against its purchase. With such expansive consumer apprehension, remanufacturers often employ marketing strategies in attempts to provide affirmation about product durability. One stratagem that remanufacturers could employ to encourage customer security are product warranties. The aim of this paper is to study and scrutinize the impact that would be had by offering renewing/non-renewing warranties on remanufactured products. The Advanced Remanufacturing-To-Order (ARTO) system deliberated on in this study is a sort of product recovery system. A discrete-event simulation model was developed from the view of remanufacturer for remanufactured items sold with twodimensional warranty, in which, an End-Of-Use product (EOUP) is subjected to preventive maintenance action when the remaining life of the product reaches a pre-specified value so that * Ammar Y. Alqahtani Surendra M. Gupta 1 Department of Industrial Engineering, Faculty of Engineering, King Abdulaziz University, Jeddah 22254, Saudi Arabia 2 Department of Mechanical and Industrial Engineering, Northeastern University, 334 Snell Engineering Center, 360 Huntington Avenue, Boston, MA 02115, USA 20 Jnl Remanufactur (2017) 7:19–47 the remanufacturer’s expected profit can be maximized. Experiments were design using Taguchi’s Orthogonal Arrays to represent the full recovery system and observe its behavior under different experimental conditions. In order to assess the impact of warranty and preventive maintenance on remanufacturer total cost, pairwise t tests were carried out along with one-way analyses of variance (ANOVA) and Tukey pairwise comparisons test for each performance measure of the ARTO system. Keywords Preventive maintenance . Warranty policies . Remanufacturing . Sensor embedded products . Extending product life-cycle . Reverse supply chain Introduction The current rapid technological change has seen facilitation of constant as well as unpredictable change in the desires customers have. This can be justified by how constantly customers abandon their outdated models in order to adopt and cope with new and emerging ones. However, it has been established that advances in technology have been at the center of increased diminished product life cycle. The result of this impact of the life cycle of products has led to an upsurge in their rate of disposal. With the rise in the disposal rates, effects can be felt through strain expressed by earth’s natural resources as well as landfill areas which have begun to reach their acute peak. It is therefore a significant idea that manufacturing firms should play significant roles in helping to manage the outdated technological products. This can be done by a mechanism where these manufacturing firms are compelled by law to ensure that they recall technological devices which have antiquated. Such initiatives will not only work to enhance their customers’ awareness about pertinent issues of environment but also promote these entities ability to meet the new regulations which have been imposed on them. It is important that these manufacturing entities come up with special facilities that are designed to handle as well as recover their products which have reached their end of lives. Developing such facilities is viewed to be impactful in the initiative set to reduce the amount of mechanical waste that is disposed on the landfills. The initiative can be made possible by encouraging the process of recovering these mechanical materials, parts as well as components from products considered to have reached their end-of-lives. The process of recovery can be conducted in diverse ways; some of these include refurbishing of the products in order to make them useful again, recycling them as well as taking them through a remanufacturing process in order to develop as good as new product from them. Such facilities used for handling end-of-use products (EOUPs) have outstanding commercial benefits. This is because it makes the whole process of making products with diminished life to be recovered to have greater relevance and become more appealing. In the process of product recovery, most facilities undertaking this work utilize one major operation known as the disassembly operation [40]. This operation is seen to be at the heart of product recovery facility mainly because of its capacity to enhance extraction of desired components from products whose life span has expired. The same process is capable of enhancing a sub assembling process in order to come up with useful materials from EOUPs. In order to enhance the disassembling operation several mechanisms can be utilized in order to make it possible. These involve effectuation of the EOUPs in a singly established workshop, being taken through a disassembling line as well as the desired operations being done in disassembling cells. Jnl Remanufactur (2017) 7:19–47 21 Nevertheless the distinction in these mechanisms is based on the amount of yield that each is capable of producing from the EOUPs. It is, therefore established that among the three utilization of a disassembling line emerges to be the most efficient since it is capable to increase the yields obtained from the operation. On the other hand the utilization of single workstation together with disassembly cells are considered to be useful due to their flexibility nature [12]. Disassembly is perceived as an operation that is focused on ensuring that an EOUP is deconstructed down to its core mechanical component. This is achievable because the process makes use of three crucial techniques [19]. These techniques (...truncated)