Economic consequences of consumer repair strategies for electrical household devices

Abstract

Purpose

The purpose of this paper is to investigate to what extent a consumer’s repair strategy impacts the annual costs of ownership of a washing machine and two types of vacuum cleaner.

Design/methodology/approach

The annual cost of ownership is determined by calculating the annual life cycle cost (LCC) for the respective devices. The annual LCCs of the different scenarios allow a comparison of the different repair strategy options. A Monte Carlo simulation is run to introduce parameter variability. The device’s failure rate is estimated by a combination of data sets on the devices’ performance.

Findings

Results demonstrate that the repair of the devices considered is a more favourable option over replacement. A consumer who aims for the lowest annual LCC should allow for a high number of repairs per device, without putting a maximum on the cost per repair. However, the consumer should become more cautious when a device approaches the end of its expected lifetime. Finally, the purchase of warranty can be interesting when the warranty covers a sufficiently long proportion of the device’s (expected) lifetime and when its cost does not exceed a threshold proportion of the initial purchase price.

Research limitations/implications

The costs for repair might be overestimated. Future research can focus on the reduction of repair costs following self-repair.

Practical implications

The results provide strong arguments in favour of repair instead of replacement of broken devices.

Originality/value

This is the first research to quantify the influence of consumer behaviour in the context of repair of devices on the ownership costs of these devices.

Citation

Brusselaers, J., Bracquene, E., Peeters, J. and Dams, Y. (2020), "Economic consequences of consumer repair strategies for electrical household devices", Journal of Enterprise Information Management, Vol. 33 No. 4, pp. 747-767. https://doi.org/10.1108/JEIM-12-2018-0283