Optimal Reliability Improvement for Used Items Sold with Warranty

The market for used products is becoming more competitive and dealers of used products use warranty to promote sales as well as to provide assurance to customers. Offering warranty results in additional costs associated with warranty servicing. This cost can be reduced through actions such as overhaul and upgrade that improves the reliability of the item. This is worthwhile only if the cost of improvement is less than the reduction in the warranty servicing cost. This paper deals with two models to decide on the reliability improvement strategies for used items sold with FRW policy.