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Determination of price and warranty length under claim rate of customer

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Proceedings of the 23rd International Conference on Industrial Engineering and Engineering Management 2016

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Abstract

In this paper, a decision model is developed for producers to determine the optimal price and warranty length to maximize profit based on the pre-determined life cycle and the rate of customer claim. The pro-rata warranty (PRW) policy is considered under which producers refund a fraction of sale price if an item fails in the warranty period. The objective function includes both demand and cost function. The variation tendency of producers’ profit will be derived for two different life distributed products. Some conclusions are drawn based on the sensitivity analysis.

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Author information

Authors and Affiliations

  1. College of Management and Economics, Tianjin University, Tianjin, 300072, China

    Zi-xian LIU & Danning LIU

Authors
  1. Zi-xian LIU
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  2. Danning LIU
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Corresponding author

Correspondence to Zi-xian LIU .

Editor information

Editors and Affiliations

  1. College of Management and Economics, Tianjin University College of Management and Economics, Tianjin, China

    Ershi Qi

  2. College of Management and Economics, Tianjin University College of Management and Economics, Tianjin, China

    Jiang Shen

  3. College of Mgmt & Economics, Tianjin University College of Mgmt & Economics, Tianjin, China

    Runliang Dou

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LIU, Zx., LIU, D. (2017). Determination of price and warranty length under claim rate of customer. In: Qi, E., Shen, J., Dou, R. (eds) Proceedings of the 23rd International Conference on Industrial Engineering and Engineering Management 2016. Atlantis Press, Paris. https://doi.org/10.2991/978-94-6239-255-7_16

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  • DOI: https://doi.org/10.2991/978-94-6239-255-7_16

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  • Publisher Name: Atlantis Press, Paris

  • Print ISBN: 978-94-6239-254-0

  • Online ISBN: 978-94-6239-255-7

  • eBook Packages: EngineeringEngineering (R0)

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