Minjae Park

Optimal post-warranty maintenance policy with repair time threshold for minimal repair

Abstract In this paper, we consider a renewable minimal repair–replacement warranty policy and propose an optimal maintenance model after the warranty is expired. Such model adopts the repair time threshold during the warranty period and follows with a certain type of system maintenance policy during the post-warranty period. As for the criteria for optimality, we utilize the expected cost rate per unit time during the life cycle of the system, which has been frequently used in many existing maintenance models. Based on the cost structure defined for each failure of the system, we formulate the expected cost rate during the life cycle of the system, assuming that a renewable minimal repair–replacement warranty policy with the repair time threshold is provided to the user during the warranty period. Once the warranty is expired, the maintenance of the system is the users sole responsibility. The life cycle of the system is defined on the perspective of the user and the expected cost rate per unit time is derived in this context. We obtain the optimal maintenance policy during the maintenance period following the expiration of the warranty period by minimizing such a cost rate. Numerical examples using actual failure data are presented to exemplify the applicability of the methodologies proposed in this paper.

A Generalized Age Replacement Policy for Systems Under Renewing Repair-Replacement Warranty

This paper presents a warranty cost model for repairable products when an age replacement policy is adopted in conjunction with the renewal of a minimal repair-replacement warranty. A study of the optimal choice of the preventive replacement age is also presented. When renewing a minimal repair-replacement warranty, either minimal repair is carried out or the product is replaced, depending on the length of repair time when the product failures occur during the warranty period. In this study, we develop mathematical formulas to evaluate the long-run expected cost rates during the life cycle of the product under the proposed cost models and determine the optimal preventive replacement ages by minimizing the objective functions. Furthermore, the effects of the renewing warranty on the optimal preventive replacement age and its corresponding expected cost rate are investigated for various situations regarding the warranty policy. This study extends the existing results on the age replacement policy by considering situations that are more practical, where both minimal repair and replacement are considered simultaneously upon product failure. Assuming that the product deteriorates with age, we illustrate our proposed cost model and its optimization using numerical examples and observe the impact of relevant parameters on the optimal solutions regarding the preventive replacement age.

Predicting European carbon emission price movements

ABSTRACT The European carbon emission trading market is critical in achieving planned carbon emission reduction for global sustainable growth. This paper investigates various statistical methods in forecasting the European carbon emission (CO2 hereafter) price movements. The paper builds a predictive regression model of CO2 price movements with past returns of various commodities and financial products. In the paper, 22 functional forms of five different classifiers are employed and CO2 price movements are forecast. Results indicate that the past returns of Brent crude futures, natural gas (NG), Financial Times Stock Exchange 100 (FTSE100), Deutscher Aktienindex (German stock index) 30 (DAX30), Cotation Assistée en Continu (French stock index) 40 (CAC40) and Standard & Poors 500 (S&P500) are statistically significant in forecasting the current CO2 price movements. The authors also found that the bagged decision tree of the ensemble classifier best forecasts the CO2 price movements. The result should be relevant to firms that wish to trade European carbon emissions.

Optimization of periodic preventive maintenance policy following the expiration of two-dimensional warranty

Abstract This paper considers an optimal periodic preventive maintenance policy after the expiration of two-dimensional warranty. During the two-dimensional warranty period, both renewal warranty and nonrenewal warranty are considered and a repair time threshold is pre-specified so that the failed system is either minimally repaired or is replaced depending on whether the length of repair time exceeds the repair time threshold or not. After the warranty expires, the system undergoes the preventive maintenance periodically a fixed number of times by the user to prolong the life of the system and then the system is replaced preventively by a new one. In this study, we develop an optimal post-warranty periodic preventive maintenance strategy by minimizing the expected cost rate incurred during the life cycle of the system. From the users perspective, the system is maintained free of charge or with prorated charge on the failed system during the warranty period. Once the warranty expires, the maintenance cost of the system is entirely charged to the user. Subject to such a cost structure, we derive the formula to evaluate the expected cost rate, which is used as an objective function for the optimality. The main goal of this paper is to determine an optimal preventive maintenance cycle after the warranty expires and thus to propose an optimal post-warranty strategy for the user. The effect of several parameters on the optimal strategy is also investigated numerically in this study. For the purpose of illustration of our proposed model, we present and discuss some numerical examples.

Mathematical Modeling for Risk Averse Firm Facing Loss Averse Customer’s Stochastic Uncertainty

To optimize the firm’s profit during a finite planning horizon, a dynamic programming model is used to make joint pricing and inventory replenishment decision assuming that customers are loss averse and the firm is risk averse. We model the loss averse customer’s demand using the multinomial choice model. In this choice model, we consider the acquisition and transition utilities widely used by a mental accounting theory which also incorporate the reference price and actual price. Then, we show that there is an optimal inventory policy which is base-stock policy depending on the accumulated wealth in each period.

Analysis of binary longitudinal data with time-varying effects

This paper considers the analysis of longitudinal data where a binary response variable is observed repeatedly for each subject over time. In analyzing such data, regression coefficients are commonly assumed constant over time, which may not properly account for the time-varying effects of some subject characteristics on a sequence of binary outcomes. This paper proposes a Bayesian method for the analysis of binary longitudinal data with time-varying regression coefficients and random effects to account for nonlinear subject-specific effects over time as well as between-subject variation. The proposed method facilitates posterior computation via the method of partial collapse and accommodates spatially inhomogeneous smoothness of nonparametric functions without overfitting via a basis search technique. The proposed method is illustrated with a simulated study and the binary longitudinal data from the German socioeconomic panel study.

The Study on Relation between Company's Efforts for Quality Management(6 sigma) and Financial Performance

ABSTRACT Purpose: In this paper, we investigate whether the endeavors for 6 sigma quality management by a firm have positive effects on its financial performance and the length of 6 sigma implemented period affects its financial status. Methods: We conduct the analysis using the data from Workplace Panel Survey 2009. We use multiple linear regression in order to analyze the relationship between the efforts for quality management and financial performance. Specifically, the return on assets (ROA) and return on equity (ROE) are investigated as dependent variables and the efforts for quality management as independent variable. The Box-Cox transformation and Cook’s distance are also used.Results: As a result of the analysis, the indication is that companies that put effect into the six sigma quality management have a positive result in its financial status. In detail, the efforts for six sigma quality management have positive effects on total asset turnover ratio and six sigma implemented period on net income to net sales ratio. Additionally, companies with longer(shorter) period of six sigma program have more (less) im-provement in its financial status.Conclusion: It can be concluded that the company’s efforts for quality management positively influence financial performance.Key Words: Box-Cox Transformation, Multiple Linear Regression, Quality Management, Return on Assets, Six Sigma

A strategy perspective on total quality management

Research on total quality management (TQM) has mainly focused on the consequences of TQM such as firm performance and the drivers of TQM such as top management team support, while the conditions that moderate the relationship between TQM and firm performance have seldom been considered. Thus, this paper attempts to investigate the conditions in which the effects of TQM are either intensified or weakened, with a sample set of 565 Korean manufacturing firms. This paper adopts a strategic perspective that considers TQM as a source of competitive advantages. The positive effect of TQM on firm performance could be measured by sales and revenue; more importantly, the results suggested that the positive effect of TQM was stronger when a firm pursues a proactive strategy (internal strategic factor) and when a firm is in its growth stage in terms of the product lifecycle (external strategic factor). Thus, managers should implement TQM earlier than their competitors to fully benefit from TQM. This study provides a more complete overview of TQM research by incorporating a strategic perspective and adding empirical evidence.

Process control and economic cost design for total quality management

For decades quality management has been developed based on the statistical techniques and quality improvement activities. This was achieved through better understanding of process control and economic cost design, which plays an important role in the statistical techniques and quality improvement activities. The integration of process control and economic cost design successfully reduced process output variability and improved process efficiency. In this paper, a review and recent works on the economic cost design, process control, and their applications are provided. Specifically, we summarise the related topics regarding the integrated process between process control and statistical techniques, explaining process controllers, process efficiency, and economic cost designs. The integration of process control and statistical techniques is shown as a research area and we promote further interest in its development and application in industry. A discussion of some research topics is also given, including future research topics.

An optimal maintenance policy for a k-out-of-n system without monitoring component failures

Abstract In this study, an optimal maintenance policy is developed for a k-out-of-n: G system subject to two types of maintenance services, preventive maintenance and corrective maintenance. We investigate the optimal replacement age when a component failure is not detected immediately until a k-out-of-n: G system fails. The optimal maintenance policy is determined to minimize the expected total system cost when a generalized block replacement model is developed using downtime period. It is assumed that component failures are not monitored until a system failure, thus, a k-out-of-n: G system failure occurs. The downtime period of each failed component using order statistics for life time and age distributions for a k-out-of-n: G system is investigated. Numerical examples are discussed in order to demonstrate the applicability of the methodology derived from this paper.