DOI Number : 10.5614/j.eng.technol.sci.2014.46.4.9
Hits : 41

Optimal Overhaul-Replacement Policies For a Repairable Machine Sold with Warranty

Kusmaningrum Soemadi1, Bermawi P. Iskandar2 & Harsono Taroepratjeka1

1Department of Industrial Engineering, National Institute of Technology (Itenas),
Jalan PHH Mustafa 23, Bandung 40123, Indonesia
2Department of Industrial Engineering, Institute Technology of Bandung (ITB),
Jalan Ganesha 10, Bandung 40123, Indonesia

Abstract. This research deals with an overhaul-replacement policy for a repairable machine sold with a free replacement warranty (FRW), which will be used for a finite horizon T and evaluated at fixed interval s. At each evaluation point, the buyer considers three alternative decisions, i.e. (1) keep the machine, (2) overhaul it, or (3) replace it with a new identical one. If the machine fails during the warranty period, this is rectified at no cost to the buyer. Any failure occurring before and after the expiry of the warranty is restored by minimal repair. An overhaul-replacement policy was formulated using a dynamic programming approach. The results show that overhaul rejuvenation may extend the machine life cycle and delay the replacement decision. In contrast, the warranty stimulates early machine replacement and in so doing increases the replacement frequency for a certain range of replacement costs. This implies that in order to minimize the total ownership costs over T, the buyer needs to consider the minimal repair cost reduction due to the rejuvenation effect of an overhaul as well as the warranty benefit due to replacement. Numerical examples are presented for both illustrating the optimal policy and describing the behavior of the optimal solution.

Keywords: dynamic programming; minimal repair; overhaul; replacement; warranty

Download Article
Bahasa Indonesia | English


Begin on 10 October 2014 this website is no longer activated for article process in Journal of Mathematical and Fundamental Sciences, Journal of Engineering and Technological Sciences, Journal of ICT Research and Applications and Journal of Visual Art and Design. The next process will be proceeded under new website at

For detail information please contact us to:

       ITB Journal Visitor Number #18448097       
       Jl. Tamansari 64, Bandung 40116, Indonesia Visitor IP Address #       
       Tel : +62-22-250 1759 ext. 121 2011 Institut Teknologi Bandung       
       Fax : +62-22-250 4010, +62-22-251 1215 XHTML + CSS + RSS       
       E-mail : or Developed by AVE