Dissertation > Economic > Economic planning and management > Enterprise economy > Production management > Product Management

Research on Pricing Strategy of Products’Preventive Maintenance Considering Consumer Utility

Author ZhangQiuLing
Tutor LuZhen
School Northeastern University
Course Management Science and Engineering
Keywords preventive maintenance maintenance period pricing warranty period failurerate
CLC F273.2
Type Master's thesis
Year 2012
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Along with the development of modern economy technology and the impact of economic globalization, market competition is more intense, and this will give producers brought great pressure, so the competition of enterprise strategy has become more diverse. The products’ price and the product competition change into products and after-sales service comprehensive competition and the non-price competition. In the commodity business, product warranty is a critical role. The reliability of product not only affects the consumers buying decisions, still affects product warranty costs, and may even affects the product’s safety in the process of using, leading to the manufacturer of a product of joint liability. In order to more effectively control product after-sales maintenance cost, manufacturer can use the preventive maintenance measures to control product failure decay. Preventive maintenance can improve the reliability of the products so as to reduce the product maintenance cost.Established on the basis of the existing research results, this paper researches pricing strategy on preventive maintenance innovatively, and introduce consumer utility into the pricing strategy. This paper focuses on the pricing strategy of the periodic preventive maintenance and failure limit preventive maintenance. The specific studies are as follows:First, on the basis of the summarized preventive maintenance theory, product reliability theory and consumer utility theory, this paper highlights how the previous scholars developed preventive maintenance strategy model, how they calculate the preventive maintenance cost and the consumer utility impact to consumer buying behavior.Second, the paper studies the periodic preventive maintenance and failure limit preventive maintenance. This article introduces the failure rate increase factor, which represents the extent of the preventive maintenance. For different failure rate increase factor, the number and price of preventive maintenance are also different. In view of the different preventive maintenance prices, consumers will have different options, so the consumer utility is considered to the pricing model of preventive maintenance strategy. With the product following the Weibull distribution, this paper defines preventive maintenance period (interval) and price as decision variables, and constructs a maintenance cost in warranty period minimization pricing model. Then, it uses integer programming theory and method to solve the pricing model, and verifies the effectiveness of the model through the numerical analysis. This article compares the maintenance cost of manufacturer and consumer with preventive maintenance and without preventive maintenance, and discusses the influence of the failure increase factor to the maintenance cost of manufacturer and consumer.Finally, a summary of the full text is brought, which sums up the conclusions and contribution of this paper, points out the inadequacy, and further research directions.

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