Some renewal theory results with application to fleet warranties

The fleet warranty guarantees the purchaser of a large population of like items that the mean life of the fleet will meet or exceed some negotiated mean μ_L. If the mean life is less than μ_L, compensation may be given in terms of a number of free replacement parts R. The expected number of replacements E[R] is studied based upon how the mean life of items in the field is determined and on whether the sampling window starts at time t = 0 (ordinary renewal process) or at some arbitrarily large time w (equilibrium renewal process). Properties of E[R] are compared and examples are given. © 1994 John Wiley & Sons, Inc.     

Applications of renewal theory in analysis of the free-replacement warranty

Under a free-replacement warranty of duration W, the customer is provided, for an initial cost of C, as many replacement items as needed to provide service for a period W. Payments of C are not made at fixed intervals of length W, but in random cycles of length Y = W + γ(W), where γ(W) is the (random) remaining life-time of the item in service W time units after the beginning of a cycle. The expected number of payments over the life cycle, L, of the item is given by M_Y(L), the renewal function for the random variable Y. We investigate this renewal function analytically and numerically and compare the latter with known asymptotic results. The distribution of Y, and hence the renewal function, depends on the underlying failure distribution of the items. Several choices for this distribution, including the exponential, uniform, gamma and Weibull, are considered.     

Stochastic modeling for computational warranty analysis

We examine two key stochastic processes of interest for warranty modeling: (1) remaining total warranty coverage time exposure and (2) warranty load (total items under warranty at time t). Integral equations suitable for numerical computation are developed to yield probability law for these warranty measures. These two warranty measures permit warranty managers to better understand time‐dependent warranty behavior, and thus better manage warranty cash reserves. © 2005 Wiley Periodicals, Inc. Naval Research Logistics, 2005.     

Computation and applications of geometric mixtures of convolutions

We consider the probability distribution of the waiting time until a lifetime in excess of T occurs in a renewal process. That distribution is a geometric mixture of the successive convolutions of a distribution with bounded support. Algorithms are developed for certain broad classes of lifetime distributions. Applications to warranty policies are discussed.     

Application of renewal theory to continuous sampling plans

Renewal theory is used to study the effectiveness of a class of continuous sampling plans first introduced by Dodge. This approach provides a simple way of viewing and computing the long-run Average Outgoing Quality (AOQ) and its maximum AOQL. More importantly, it is used to study the average outgoing quality in a short production run through an approximation formula AOQ^*(t). Formulas for AOQ and AOQ^*(t) are provided. By simulation, it is found that AOQ^*(t) is sufficiently accurate in situations corresponding to actual practice.     

Warranty claims modeling

A company wishes to estimate or predict its financial exposure in a reporting period of length T (typically one quarter) because of warranty claims. We propose a fairly general random measure model which allows computation of the Laplace transform of the total claim made against the company in the reporting interval due to warranty claims. When specialized to a Poisson process of both sales and warranty claims, statistical estimation of relevant quantities is possible. The methodology is illustrated by analyzing automobile sales and warranty claims data from a large car manufacturer for a single car model and model year. © 2008 Wiley Periodicals, Inc. Naval Research Logistics, 2008     

Diffusion approximation to the G/G/R machine repair problem with warm standby spares

The G/G/R machine repair problem with M operating machines, S warm standby spares, and R repairmen is studied as a diffusion process. The steady-state equations are formulated as diffusion equations subject to two reflecting barriers. The approximate diffusion parameters of the diffusion equations are obtained (1) under the assumption that the input characteristics of the problem are defined only by their first two moments rather than their probability distribution function, (2) under the assumption of heavy traffic approximation, that is, when queues of failed machines in the repair stage are almost always nonempty, and (3) using well-known asymptotic results from renewal theory. Expressions for the probability density functions of the number of failed machines in the system are obtained. A study of the derived approximate results, compared to some of the exact results, suggests that the diffusion approach provides a useful method for solving complex machine-repair problems.     

Estimating a survival curve when new is better than used with respect to a distinguished set

Hollander, Park, and Proschan define a survival function S of a positive random variable X to be new better than used at age t₀ (NBU-{t₀}) if S satisfies $ \begin{array}{*{20}c} {\frac{{S(x + t_0)}}{{S\left({t_0} \right)}} \le S\left(x \right),} & {{\rm for}\,{\rm all}\,x\, \ge \,0,} \\ \end{array}$ where S(x) = P(X > x). The NBU-{t₀} class is a special case of the NBU-A family of survival distributions, where A is a subset of [0, ∞). These families introduce a variety of modeling possibilities for use in reliability studies. We treat problems of nonparametric estimation of survival functions from these classes by estimators which are themselves members of the classes of interest. For a number of such classes, a recursive estimation technique is shown to produce closed-form estimators which are strongly consistent and converge to the true survival distribution at optimal rates. For other classes, additional assumptions are required to guarantee the consistency of recursive estimators. As an example of the latter case, we demonstrate the consistency of a recursive estimator for S ∈ NBU-[t₀, ∞) based on lifetime data from items surviving a preliminary “burn-in” test. The relative precision of the empirical survival curve and several recursive estimators of S are investigated via simulation; the results provide support for the claim that recursive estimators are superior to the empirical survival curve in restricted nonparametric estimation problems of the type studied here.     

Stochastic control of queueing systems

Suppose that the state of a queueing system is described by a Markov process { Y_t, t ≥ 0}, and the profit from operating it up to a time t is given by the function f(Y_t). We operate the system up to a time T, where the random variable T is a stopping time for the process Yt. Optimal stochastic control is achieved by choosing the stopping time T that maximizes Ef(Y_T) over a given class of stopping times. In this paper a theory of stochastic control is developed for a single server queue with Poisson arrivals and general service times.     

Transient solution of a finite-capacity M/Ga,b/1 queueing system

In this article we consider a single-server, bulk-service queueing system in which the waiting room is of finite capacity. Arrival process is Poisson and all the arrivals taking place when the waiting room is full are lost. The service times are generally distributed independent random variables and the distribution is depending on the batch size being served. Using renewal theory, we derive the time-dependent solution for the system-size probabilities at arbitrary time points. Also we give expressions for the distribution of virtual waiting time in the queue at any time t.     

Peak rate of occurrence of a poisson process

Suppose that a nonhomogeneous Poisson process is observed for a length of time T, say Let λ (t) denote the mean value function of the process. It is assumed that λ (t) is first increasing then decreasing inside the interval (0, T) with peak at t = t₀, say. Three methods are given for estimating to. One of these methods is nonparametric, and the other two methods are based on the standard regression technique and the maximum likelihood principle The given resull has application in a problem of determining the azimuth of a target from the radar-impulse data. The time series of incoming signals may be approximated by the occurrence of a nonhomogeneous Poisson process with mean value function λ (t). The azimuth of the target is reasonably determined from the direction of the axis of the radar beam at the instant to, corresponding to the peak value of λ (t).     

On a Markov‐modulated shock and wear process

We present transient and asymptotic reliability indices for a single‐unit system that is subject to Markov‐modulated shocks and wear. The transient results are derived from the (transform) solution of an integro‐differential equation describing the joint distribution of the cumulative degradation process and the state of the modulating process. Additionally, we prove the asymptotic normality of a properly centered and time‐scaled version of the cumulative degradation at time t. This asymptotic result leads to a simple normal approximation for a properly centered and space‐scaled version of the systes lifetime distribution. Two numerical examples illustrate the quality of the normal approximation. © 2009 Wiley Periodicals, Inc. Naval Research Logistics 2009     

Asymptotic distribution of some multivariate “success run” renewal processes,applied to a 2-i.i.d. unit repairable system

If the probability of “failure” in a multivariate renewal process of the “success run” type is very small, then if certain conditions are imposed on the components of the renewals, the joint distribution of their total durations is approximately exponential with all mass along one line. This result is applied to a 2-i.i.d. unit repairable system of the “1 out of 2:G, Cold Standby” type.     

Some probability functions in reliability and their applications

There has been much research on the general failure model recently. In the general failure model, when the unit fails at its age t, Type I failure (minor failure) occurs with probability 1 ? p(t) and Type II failure (catastrophic failure) occurs with probability p(t). In the previous research, some specific shapes (constant, non‐decreasing, or bathtub‐shape) on the probability function p(t) are assumed. In this article, general results on some probability functions are obtained and applied to study the shapes of p(t). The results are also applied to determining the optimal inspection and allocation policies in maintenance problems. © 2006 Wiley Periodicals, Inc. Naval Research Logistics, 2007     

Future supply uncertainty in EOQ models

This article deals with an inventory problem where the supply is available only during an interval of (random) length X. The unavailability of supply lasts for a random duration Y. Using concepts from renewal theory, we construct an objective function (average cost/time) in terms of the order-quantity decision variable Q. We develop the individual cost components as order, holding, and shortage costs after introducing two important random variables. Due to the complexity of the objective function when X and Y are general random variables, we discuss two special cases and provide numerical examples with sensitivity analysis on the cost and noncost parameters. The article concludes with a discussion of the comparison of the current model with random yield and random lead-time models. Suggestions for further research are also provided.     

Basic scheduling problems with raw material constraints

One of the achievements of scheduling theory is its contribution to practical applications in industrial settings. In particular, taking finiteness of the available production capacity explicitly into account, has been a major improvement of standard practice. Availability of raw materials, however, which is another important constraint in practice, has been largely disregarded in scheduling theory. This paper considers basic models for scheduling problems in contemporary manufacturing settings where raw material availability is of critical importance. We explore single scheduling machine problems, mostly with unit or all equal processing times, and L_max and C_max objectives. We present polynomial time algorithms, complexity and approximation results, and computational experiments. © 2005 Wiley Periodicals, Inc. Naval Research Logistics, 2005.     

On excess-, current-, and total-life distributions of phase-type renewal processes

Consider a renewal process whose interrenewal-time distribution is phase type with representation (α, T). We show that the (time-dependent) excess-life distribution is phase type with representation (α′, T), where α′ is an appropriately modified initial probability vector. Using this result, we derive the (time-dependent) distributions for the current life and the total life of the phase-type renewal process. They in turn enable us to obtain the equilibrium distributions for the three random variables. These results simplify the computation of the respective distribution functions and consequently enhance the potential use of renewal theory in stochastic modeling—particularly in inventory, queueing, and reliability applications. © 1992 John Wiley & Sons, Inc.     

Sojourn times in G/M/1 fork‐join networks

We consider a processing network in which jobs arrive at a fork‐node according to a renewal process. Each job requires the completion of m tasks, which are instantaneously assigned by the fork‐node to m task‐processing nodes that operate like G/M/1 queueing stations. The job is completed when all of its m tasks are finished. The sojourn time (or response time) of a job in this G/M/1 fork‐join network is the total time it takes to complete the m tasks. Our main result is a closed‐form approximation of the sojourn‐time distribution of a job that arrives in equilibrium. This is obtained by the use of bounds, properties of D/M/1 and M/M/1 fork‐join networks, and exploratory simulations. Statistical tests show that our approximation distributions are good fits for the sojourn‐time distributions obtained from simulations. © 2008 Wiley Periodicals, Inc. Naval Research Logistics, 2008     

Distributions of manufacturer's and user's replacement costs under warranty

We derive and compute time-dependent distributions of replacement costs under warranty over the product life cycle, both for the manufacturer and the user, under conditional pro-rata and nonrenewing free-replacement warranty policies. For pro-rata warranties, the analysis is based on the joint distribution of the number of replacements and the user's cost over time. For free-replacement warranties, distribution of the user's cost follows from the observation that replacement points outside warranty periods form a renewal process. This property is also exploited to determine the distribution of the manufacturer's cost. We apply our findings to measure the impact of product conformance quality on warranty cost distributions and find that manufacturer's cost measures are more sensitive to changes in quality than user's cost measures. © 1995 John Wiley & Sons, Inc.     

An integral equation for the second moment function of a geometric process and its numerical solution

In this article, an integral equation satisfied by the second moment function M₂(t) of a geometric process is obtained. The numerical method based on the trapezoidal integration rule proposed by Tang and Lam for the geometric function M(t) is adapted to solve this integral equation. To illustrate the numerical method, the first interarrival time is assumed to be one of four common lifetime distributions, namely, exponential, gamma, Weibull, and lognormal. In addition to this method, a power series expansion is derived using the integral equation for the second moment function M₂(t), when the first interarrival time has an exponential distribution.