Time: Thursday 6 January 2022, 10:00am - 11:00am
Tencent Conference Number: 340 821 978
Speaker: Associate Professor Yap Chee Seong, National University of Singapore University
Speaker Bio.
Dr. Ye Zhisheng graduated from Tsinghua University with a Bachelor's degree in Materials Science and Engineering and studied at the Department of Industrial and Systems Engineering, National University of Singapore (NUS) for his PhD. He is currently an Associate Professor in the Department of Industrial Systems Engineering and Management at NUS. His main research interests include remaining life prediction, reliability modelling, and data-driven operational decision making.
Brief Description of Report.
Extended warranty has become a rich source of profits for manufacturers. In the current marketplace, two-dimensional extended warranties are often sold to all customers with a fixed coverage region and the same price. However, customers are heterogeneous because they have different use rates and failure history, which would significantly affect the cost of the extended warranty. In this study, we first propose a customized extended warranty strategy that takes into account the use rate of the customer. Under the strategy, we develop a warranty cost model to compute the expected repair cost and the expected profit of the manufacturer, based on which the optimal price for the customized extended warranty can be determined. Building upon this model, we further propose a policy that makes use of both the customer's use rate and the product's failure history. We conduct a comprehensive numerical study to compare the two proposed policies with the prevailing fixed-region strategy. The results reveal that the customized policies are better than the prevailing policy in terms of fairness, flexibility, and profitability.
(Organised by: Department of Management Science and Logistics, Centre for Research and Academic Communication)
