Two-echelon three-indenture warranty distribution network: a hybrid branch and bound, Monte-Carlo approach

In today competitive world, providing warranty services must be responder and affordable. Hence, applying warranty distribution networks are often used to handle customers’ requests in time in addition to controlling the costs of supplying the after-sales services. Therefore, proper designing of warranty distribution networks has competitive advantage for its suppliers. In this paper, an integer nonlinear programming model for optimizing warranty distribution network of multi-indenture products under the opportunistic maintenance policy and from the third party point of view is provided. This network is two-echelon and deals with supporting one manufacturer’s customers. The third party aims to determine optimal level of spare parts for each product’s item in each repairing centers so that the overall items backorders during the warranty period is minimized. Moreover, the total costs of supplying spare parts and the opportunistic maintenance cost should be controlled. Due to complexity of the suggested model, an exact hybrid solution procedure is provided in which firstly random failures are simulated by Monte-Carlo simulation and then the optimal solutions are obtained using the branch and bound algorithm. To increase the search speed of the branch and bound approach, estimation of the upper bound is carried out via variable neighborhood search algorithm. As the study, the developed warranty distribution network will be applied for optimizing maintenance logistic of battery packs in electric vehicles. The results showed that the designed after-sale services network leads to considerable economic retrenchment in costs of the warranty period alongside minimizing the overall number of battery pack backorders.