optimizing decisions on under- and out-of-warranty products in a finite planning horizon

In this paper, we consider a manufacturer that produces products in a nite horizon time and sells products with non-renewing free replacement warranty (frw) policy. the manufacturer is responsible to provide spare parts for failed products, whether the products are under or out of warranty. previous research on warranty optimization has focused on maximizing manufacturer pro t without considering the spare parts market for out-of-warranty products. this study proposes a novel nonlinear model that maximizes manufacturer pro t by optimization of price, warranty length, and spare parts inventory for under- and out-of-warranty products in a manufacturing/remanufacturing system. due to the unique structure of the model, we propose a new two-stage approach that combines metaheuristic and an exact method, in which the rst stage is to determine prices and warranty length of product by the metaheuristic algorithm and in the second stage, the remaining inventory-related problem is transferred to a minimum cost network ow problem solved for spare parts inventory control. to illustrate e ectiveness of the suggested method, the model is solved for the case study of iranian sanam electronic company with two di erent metaheuristic algorithms and a sensitivity analysis is conducted to study the e ect of various parameters on the optimal solution.