Mitigating Administrative Fraud in Warranty Service for Remanufactured Products

Manufacturers and remanufacturers strive to maximize supply chain effectiveness by eliminating wastes in all their forms. This line of research extends the effectiveness during the products' working lives. Fraud in the warranty service chain (WSC) is one such source of waste that leads to revenue losses in the short term but when left unchecked leads to far worse results in the long term. Warranty frauds in the new product industry have received significant attention in recent literature. Addressing fraud issues in the remanufacturing industry have not been a high priority. Previous studies considered the primary parties in the WSC as possible sources of fraud. However, several unique opportunities exist for the secondary parties when it comes to fraud. This chapter considers fraud originating from one of the secondary parties of the WSC, namely the warranty administrator. The chapter models this fraud scenario using discrete event simulation and explores a possible fraud mitigation scenario.