Bayesian approaches for optimizing warranty length of products

‎Today's manufacturers face increasingly intense competition and to remain profitable they needed to design‎, ‎develop and produce high reliable products‎. ‎One way by which manufacturers attract consumers to their products is by providing warranties on the products‎. ‎Consumers are willing to purchase a longer warranty period product‎. ‎While maintaining such a policy needs very high cost for manufacturers‎. ‎Determining the appropriate warranty length becomes an important decision problem for manufacturers‎. ‎In this article‎, ‎by Bayesian approach and using an appropriate utility function‎, ‎we determine the optimal warranty lengths for product with exponential life time distribution‎.