Reliable product-service supply chains for repairable products

• Published in: Transportation research. Part E, Logistics and transportation review Vol. 95; pp. 299 - 321
• Main Authors: Rezapour, Shabnam, Allen, Janet K., Mistree, Farrokh
• Format: Journal Article
• Language: English
• Published: Exeter Elsevier India Pvt Ltd 01.11.2016; Elsevier Sequoia S.A
• Subjects: After-sales services; Durable products; Failure free warranty; Logistics; Markets; Mathematical models; Packages; Product reliability; Production planning; Repair process; Strategy; Studies; Supply & demand; Supply chain management; Supply chain planning; Supply chains; Supplying; Transportation; Uncertainty management; Upstream; Warranties; After-sales services; Failure free warranty; Repair process; Uncertainty management; Durable products; Supply chain planning
• ISSN: 1366-5545; 1878-5794
• DOI: 10.1016/j.tre.2016.07.016

•Concurrent flow planning in forward and after-sales supply chains is considered.•Defective products returned inside the warranty period are repairable.•Demand for product and repair is stochastic in pre- and after-sales markets.•Uncertainty in the performance of facilities is considered in both chains.•Uncertainty propagation is quantified and a method is developed to neutralize it. A mathematical model is developed for integrated flow planning in forward and after-sales supply chains of a company supplying repairable product-warranty packages to markets. Ignoring their interactions, these two supply chains are usually planned separately in literature. We consider demand- and supply-side variations in pre- and after-sales demands and qualified outflow of the SCs’ facilities. We show that to neutralize the impact of variations, orders should be amplified by moving from the downstream to the upstream of chains. Results of an example from the gear industry show what interdependencies exist between the company’s retail price, service levels, and warranty strategies.