Post-Warranty Block Replacement Policy with Minimal Repair for Products Continuously Monitored During the Warranty Period

A novel model to assess a post-warranty block replacement policy for a product whose deterioration follows an inverse Gaussian process is introduced. The product is continuously monitored throughout the warranty period. If during the warranty period, the deterioration of the product reaches some specified threshold level, the product is repaired without cost to the customer. When the warranty contract expires, it is not renewed; rather, a hybrid preventive maintenance (PM) procedure is applied to the product, after which the customer maintains the product under a block replacement policy with minimal repair. The hybrid PM reduces the deterioration level of the product and effectively lowers its age. Using the proposed model, we find the optimal threshold at which the product is to be repaired by minimizing the manufacturer’s expected repair cost during the warranty period. We then find the optimal deterioration level and age for the hybrid PM, along with the optimal time for a block replacement, by minimizing the expected loss for the customer. Key properties of the model are examined through numerical analyses and important perspectives on the derived optimal solutions are provided.