Two-level warranty contract between service agent and consumer by considering Stackelberg equilibrium (Case study : A truck after-sales service agent in Iran)

Warranty and maintenance contracts play an important role in product life cycle.  Different failures which occur during useful life cycle of products in additional reducing reliability, make expense for consumer and service agent. This study considers warranty periods and maintenance services costs from service agent and consumer viewpoints under two-dimensional warranty policy. By regarding agent service and consumer decisions, the interactions between them are modeled during the base warranty and extended warranty periods. Maintenance policies are performed as preventive maintenance (PM) in specific interval with fixed level, and corrective maintenance (CM) is carried out as home and road repairs. Finally, for making equilibrium between profits of consumers with different usage rates and agent services, preventive maintenance number and warranty services price are investigated by the Stackelberg equilibrium. A real case study from a truck after sales services agent of Iran is presented to illustrate the application of the proposed model.