Estimating cost and profitability of warranty are the most important factors in
managers’ decision making. Today employing the remanufactured and
refurbished strategies are the best choices to use the best equipment as well as
manage the operational cost. It also helps to enhance the profitability and
protect the environment from e-waste. Although used products give an
opportunity to purchase latest technology, customers are doubtful about quality
and reliability of these products. Because of limitation of buying used products,
some countries set warranty requirement to ensure reliability. In this paper, we
aim to have a comparative view between two upgrading strategies named
refurbished, remanufactured and estimating the effect of selecting these
strategies on warranty cost and company’s profitability, and on the other hand,
we compare this result with new product outcome. For this purpose, the failure
data of 60 medical devices of a leading company has analyzed from 2013 to
2014. For each strategy (performing remanufactured,performing refurbished
and buying new products), 10 devices were selected and monitored over a year.
The result shows that remanufactured strategy causes reasonable warranty
costs and profitability. This help manager to have a deep understanding, and
decide on the profitable strategies leads to improve their competitiveness.
