Repair and replacement strategy for optimizing cost and time of warranty process using integer programming

Warranty is an assurance issued by a company as the manufacturer to guarantee that its product is damage-free within a specified period. The warranty process is usually carried out when a complaint or damage regarding the product is received. The warranty process consists of two decisions that the company establishes to handle the process. The occurring problem is in the warranty process; there is not any standard established to determine the cost to incur for the warranty process. In this research, integer programming method was used to do optimization on repair and replacement strategy in warranty process. Before doing optimization, mathematical model must be created. Using that mathematical model, the results show that the costs of the warranty process decrease by 16.97%, while the time increases by 13.9%. So, with this method company will be increase the profit.