Nowadays, offering extended warranty is considered as a lucrative source of income from the perspective of the after-sale service providers. Meanwhile, the main concern is presence or absence of base warranty and strategies adopted by the manufacturer during this period. Moreover, extended warranty structure must be responsive and customer oriented, which not only control the services cost but ...

We approximate the distribution of total expenditure of a retail company over warranty claims incurred in a fixed period [0, T ], say the following quarter. We consider two kinds of warranty policies, namely, the non-renewing free replacement warranty policy and the non-renewing pro-rata warranty policy. Our approximation holds under modest assumptions on the distribution of the sales process o...

Abstract: In recent decades, high profits of extended warranty have caused that third-party firms consider it as a lucrative after-sales service. However, customers division in terms of risk aversion and effect of offering extended warranty on manufacturers’ basic warranty should be investigated through adjusting such services. Since risk-averse customers welcome extended warranty, while the cu...

Purpose: In this paper, the minimal repair-replacement warranty policy is used to carry out a warranty cost analysis with warranty servicing times and failure times that are statistically correlated to bivariate distributions. Methods: Based on the developed approach by Park and Pham (2012a), we investigate the property of the Freund’s bivariate exponential distribution and obtain the number of...

Warranty is a powerful marketing tool for the manufacturer and a good protection for both the manufacturer and the customer. However, warranty always involves additional costs to the manufacturer, which depend on product reliability characteristics and warranty parameters. This paper presents an approach to optimisation of warranty parameters for known product failure distribution to reduce the...

This paper addresses the effect of twodimensional warranty policies on the procedure for forecasting the cost of unreliability. Automotive warranties are characterized by age or time in service and vehicle usage mileage. This paper presents a model where the usage time is a primary variable and the mileage accumulation is estimated from field return data. At each time interval the probability o...

All multi-component product manufacturing companies face the problem of warranty cost estimation. Failure rate analysis of components plays a key role in this problem. Data source used for failure rate analysis has traditionally been past failure data of components. However, failure rate analysis can be improved by means of fusion of additional information, such as symptoms observed during afte...

This paper presents a warranty forecasting method based on stochastic simulation of expected product warranty returns. This methodology is presented in the context of a high-volume product industry and has a specific application to automotive electronics. The warranty prediction model is based on a piecewise application of Weibull and exponential distributions, having three parameters, which ar...