Warranty Cost Analysis for Second-hand Products Using Bivariate Approach

5.1 INTRODUCTION Up to now, warranty cost models for new products have been analyzed. In view of the present day market, customers are more attracted towards the secondhand products. Thus the present and the succeeding chapters of this thesis focus on analyzing the secondhand products by providing two-dimensional warranty for such products. A two-dimensional warranty policy is characterized by a region in a two-dimensional plane with one representing time and the other representing usage. A typical example is an automobile warranted for three years or 50,000 kilometers of travel. Blischke and Murthy (1992) developed a taxonomy to classify the different one and two-dimensional warranty policies. Kim and Rao (2000) dealt with two-attribute warranty policies for non-repairable items and derived an analytical expression for two-dimensional renewal function and cost of warranty under the assumption of bivariate exponential failure distribution. Yang and Nachlas (2001) described two approaches to