| Abstract: | Extended warranty has recently obtained increasing attention from both manufacturers and customers in China. In this paper,given the reality of China, two types of non-renewing extended warranty were proposed: one-dimensional extended warranty and two-dimensional extended warranty. And a combined warranty policy including pro-rata warranty policy and free-repair warranty policy was applied in these two types of warranty. Then the expected life-cycle cost models from the manufacturer and consumer's perspectives were developed considering different maintenance options. The optimal warranty policy, maintenance options,and warranty price were adopted in terms of a win-win interval which was determined by the maximum extra cost the consumer should pay and the minimum price the manufacture should sell at the extended warranty. Finally,a case study was given to prove the effectiveness and validity of the model. |
