Warranty optimization in a dynamic environment
type: Item
instance of: scholarly article
title: Warranty optimization in a dynamic environment
zbMATH Open document ID: 1175.90311
DOI: 10.1155/2009/414507
author: Nedialko B. Dimitrov
author: Stefanka Chukova
published in: Journal of Applied Mathematics and Decision Sciences
publication date: 2009-11-23T00:00:00Z
full work available at URL: https://eudml.org/doc/224156
review text: Summary: A product warranty is an agreement offered by a producer to a consumer to replace or repair a faulty item, or to partially or fully reimburse the consumer in the event of a failure. Warranties are very widespread and serve many purposes, including protection for producer, seller, and consumer. They are used as signals of quality and as elements of marketing strategies. In this study we review the notion of an online convex optimization algorithm and its variations, and apply it in warranty context. We introduce a class of profit functions, which are functions of warranty, and use it to formulate the problem of maximizing the company's profit over time as an online convex optimization problem. We use this formulation to present an approach to setting the warranty based on an online algorithm with low regret. Under a dynamic environment, this algorithm provides a warranty strategy for the company that maximises its profit over time.
Mathematics Subject Classification ID: 90C25
Mathematics Subject Classification ID: 90B25
Mathematics Subject Classification ID: 91G99
zbMATH DE Number: 5637294
Wikidata QID: Q58646835
MaRDI profile type: Publication
OpenAlex ID: W2064593048
cites work: Product warranty management. I: A taxonomy for warranty policies
cites work: Warranty cost analysis: non‐zero repair time
cites work: Online convex optimization in the bandit setting: gradient descent without a gradient
cites work: Logarithmic regret algorithms for online convex optimization
DBLP publication ID: journals/jamds/DimitrovC09
description: scientific article; zbMATH DE number 5637294