Sensor embedded products utilize sensors implanted into products during their production process. Sensors are useful in predicting the best warranty policy and warranty period to offer a customer for remanufactured components and products. The conditions and remaining lives of components and products can be estimated prior to offering a warranty based on the data provided by the sensors. This helps reduce the number of claims during warranty periods, determines the right preventive maintenance (PM) policy, and eliminates unnecessary costs inflicted on the remanufacturer. The renewing, one-dimensional Free Replacement Warranty (FRW), Pro-Rata Warranty (PRW), and combination FRW/PRW policies’ costs for remanufactured products and components were evaluated with/without offering PM for different periods in this paper. To that end, the effect of offering renewable, one-dimensional, Free Replacement Warranty (FRW), or Pro-Rata Warranty (PRW), or combination FRW/PRW warranty policies for each disassembled component and sensor embedded remanufactured product was examined, and the impact of sensor embedded products on warranty costs was assessed. A case study and varying simulation scenarios is examined and presented to illustrate the model’s applicability.
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