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Book part
Publication date: 14 November 2011

Amitava Mitra and Jayprakash G. Patankar

This chapter considers warranty policies involving two attributes, such as the time elapsed since sale of the product and product usage at a given point in time. Examples of such…

Abstract

This chapter considers warranty policies involving two attributes, such as the time elapsed since sale of the product and product usage at a given point in time. Examples of such policies are found for automobiles, where warranty may be invoked by the consumer if both time and usage are within specified warranty parameters when a product failure occurs. Here, we assume that usage and product age are related through a random variable, the usage rate, which may have a certain probabilistic distribution as influenced by consumer behavior patterns. Furthermore, product failure rate is influenced by the usage rate and product age as well as research and development expenditures per unit. It is assumed that, in production, there is a learning effect with time. The attained market share of a product will be influenced by the warranty policy parameters of warranty time and usage limit and also by the product price and product quality. An integrated model is developed to address multiobjective goals such as attainment of a specified level of market share and net profit per unit when manufacturing and warranty costs are taken into account. The impact of the goal priorities are investigated on the attained warranty policy parameters.

Details

Advances in Business and Management Forecasting
Type: Book
ISBN: 978-0-85724-959-3

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Book part
Publication date: 12 April 2012

Amitava Mitra and Jayprakash G. Patankar

Two-attribute warranty policies are considered that incorporate, for example, the time elapsed since sale of the product and product usage at a given point in time. Such policies…

Abstract

Two-attribute warranty policies are considered that incorporate, for example, the time elapsed since sale of the product and product usage at a given point in time. Such policies occur in consumer products, such as automobiles, where warranty may be exercised if both time and usage are within specified warranty parameters when a product failure occurs. In this chapter, it is assumed that usage and product age are related through a random variable, the usage rate, which may have a certain probabilistic distribution as influenced by consumer behavior patterns. Product quality is modeled through the product failure rate, which is influenced by unit research and development expenditures as well as the usage rate and product age. The attained market share of the product is modeled as a function of the warranty policy parameters of price, warranty time, and usage limit, with product quality also having an influence. Attainment of single and multiple objectives are explored. Such objectives encompass expected total unit costs as a proportion of unit product price and market share.

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Applications of Management Science
Type: Book
ISBN: 978-1-78052-100-8

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Book part
Publication date: 17 November 2010

Amitava Mitra and Jayprakash G. Patankar

Some consumer durables, such as automobiles, involve warranties involving two attributes. These are time elapsed since the sale of the product and the usage of the product at a…

Abstract

Some consumer durables, such as automobiles, involve warranties involving two attributes. These are time elapsed since the sale of the product and the usage of the product at a given point in time. Warranty may be invoked by the customer if both time and usage are within the specified warranty parameters and product failure occurs. In this chapter, we assume that usage and product age are related through a random variable, the usage rate, which may have a certain probabilistic distribution as influenced by consumer behavior pattern. Further, product failure rate is influenced by the usage rate and product age. Of importance to the organization is to contain expected warranty costs and select appropriate values of the warranty parameters accordingly. An avenue to impact warranty costs is through research on product development. This has the potential to reduce the failure rate of the product. The objective then becomes to determine warranty parameters, while constraining the sum of the expected unit warranty costs and research and development (R&D) costs per unit sales, under a limited R&D budget.

Details

Advances in Business and Management Forecasting
Type: Book
ISBN: 978-0-85724-201-3

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Book part
Publication date: 7 October 2010

Amitava Mitra and Jayprakash G. Patankar

For certain consumer durables, such as automobiles, warranty policies involve two attributes. These could be the time elapsed since sale of the product and usage of the product at…

Abstract

For certain consumer durables, such as automobiles, warranty policies involve two attributes. These could be the time elapsed since sale of the product and usage of the product at a given point in time. Warranty may be invoked by the consumer if both time and usage are within specified warranty parameters when a product failure occurs. In this chapter, we assume that usage and product age are related through a random variable, the usage rate, which may have a certain probabilistic distribution as influenced by consumer behavior patterns. Additionally, product failure rate is influenced by the usage rate and product age. The integrated model includes expected unit warranty costs, expected unit research and development costs, and expected unit production costs. It is assumed that in production, there is a learning effect with time. A multiobjective model is incorporated with the objectives being market share and proportion of expected warranty costs relative to total manufacturing expenditures per unit. The goals could be conflicting in nature. The problem then is to determine the warranty policy parameters while attaining certain desirable values of the two objectives.

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Applications in Multicriteria Decision Making, Data Envelopment Analysis, and Finance
Type: Book
ISBN: 978-0-85724-470-3

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Article
Publication date: 1 September 2005

Rezaul Karim and Kazuyuki Suzuki

To provide a brief survey of the literature directed towards the analysis of warranty claim data.

3209

Abstract

Purpose

To provide a brief survey of the literature directed towards the analysis of warranty claim data.

Design/methodology/approach

For convenience, this survey of the analysis of warranty claims data is somewhat arbitrarily be classified by topics as follows: age‐based claims analysis, aggregated warranty claims analysis, marginal counts of claims analysis, warranty claims analysis by using covariates, estimation of lifetime distribution using supplementary data, two‐dimensional warranty, warranty costs analysis, sales lag and reporting lag analysis, and forecasts of warranty claims.

Findings

Emphasis is placed on a discussion of different kinds of warranty claims data selected from reviews and on a comparison of the statistical models and methods used to analyze such data.

Research limitations/implications

Since the literature on product warranty data is vast, more work on this problem is needed.

Practical implications

This review points out why warranty claims data is important and gives a survey of the literature pertaining to the analysis of such data. The emphasis is on the analysis of minimal databases of real warranty data, constructed by combining information from different sources, which can be collected economically and efficiently through service networks. The research is applicable for those responsible for product reliability, product design decisions and warranty management in manufacturing industries.

Originality/value

The paper reviews different statistical models and methods used to analyze warranty claims data. The statistical models and methods presented are be valuable and meaningful tools for product reliability and warranty management and analysis.

Details

International Journal of Quality & Reliability Management, vol. 22 no. 7
Type: Research Article
ISSN: 0265-671X

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Article
Publication date: 2 January 2018

Yanrong Li, Qingqing Zhao and Shuguang He

The purpose of this paper is to build a warranty cost model for consumer electronics with short lifecycle and frequently upgraded process in generations. Meanwhile, a new warranty…

263

Abstract

Purpose

The purpose of this paper is to build a warranty cost model for consumer electronics with short lifecycle and frequently upgraded process in generations. Meanwhile, a new warranty service method of replacing the failed old generation (OG) products by new generation (NG) products is proposed to cease the service capability for the OG products from manufacturers’ viewpoint.

Design/methodology/approach

A model is built to find an optimal time to switch to the new warranty service method to minimize the warranty cost of the OG products. The inventory cost of spare parts of OG products for warranty, repair cost and manufacturing cost of NG products are taken into account. Meanwhile, a mixed strategy is studied by providing options to customers for replacing their failed OG products with NG products by paying a discounted price of the OG products. Moreover, numerical experiments are conducted to test the effects of different parameters on the optimal solutions.

Findings

Solutions to the proposed model are discussed with analytic method and it is proved that the optimal solution exists in the considered situations. The mixed strategy considering the willingness of customers can result in the reduction of the warranty cost.

Originality/value

This paper analyzes the situation that more than one generations of products are in the marketplace simultaneously. Furthermore, this work makes a useful contribution for manufacturers to decrease their warranty cost by changing the service method, and provides the optimal warranty strategy for manufacturers considering the willingness of customers.

Details

International Journal of Quality & Reliability Management, vol. 35 no. 1
Type: Research Article
ISSN: 0265-671X

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Article
Publication date: 19 April 2011

D.K. Manna, Surajit Pal and Sagnik Sinha

The purpose of this paper is to characterise the failure model of a system that is covered by a two‐dimensional warranty, one dimension depicting time and the other usage…

430

Abstract

Purpose

The purpose of this paper is to characterise the failure model of a system that is covered by a two‐dimensional warranty, one dimension depicting time and the other usage. Specifically, the authors study the effect of use‐rate on system life when each constituent component life is described by an accelerated‐failure‐time (AFT) type model.

Design/methodology/approach

The paper evaluates the effect of use‐rate on the expected failure time of a system having different internal configurations involving components. Firstly, the coherent structure as well as modules with redundant structures (standby and load‐sharing) are analysed, whereby component failures are assumed to be conditionally independent. Study systems of some basic configurations with a general dependence structure among component failure instances are also studied.

Findings

The results strongly indicate that, irrespective of the internal component‐configuration of the system, the models should posses the property that the expected failure time given the use‐rate is a non‐increasing function of use‐rate. The study also reveals that dependence among components arises quite naturally due to variability in use‐rate, even when all other factors of the usage environment are held constant.

Research limitations/implications

The findings of this paper are the outcome of a theoretical investigation. Although they are supported by some real‐life cases as cited from the literature, it is important that they are validated through more examples.

Practical implications

The results would find a direct application in the analysis of two‐dimensional warranty policies as well as the reliability assessment of consumer durables.

Originality/value

The proposed approach to the characterisation of a bivariate failure model (indexed by time and usage) is quite realistic. This investigation may lead to the development of a more suitable model.

Details

International Journal of Quality & Reliability Management, vol. 28 no. 4
Type: Research Article
ISSN: 0265-671X

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Article
Publication date: 1 June 2003

Surajit Pal and G.S.R. Murthy

In this article we present an application of Gumbel's bivariate exponential distribution model in the context of estimating warranty costs of motor cycles under a new warranty…

1392

Abstract

In this article we present an application of Gumbel's bivariate exponential distribution model in the context of estimating warranty costs of motor cycles under a new warranty policy. The problem in question is as follows: Under the present two‐dimensional warranty policy, repair costs (termed as warranty costs) of a motorcycle during the age of first six months or within the usage of 8,000 kilometers are borne by the company. To enhance customer satisfaction, the company wanted to bear the repair costs up to an age of one year or a usage of 12,000 kilometers. The problem is to estimate the expected hike in warranty costs if the warranty policy were revised as mentioned above. Using the past data, the problem is solved by studying the underlying renewal process. Gumbel's bivariate exponential distribution function is found to be useful in approximating the renewal function. Some practical difficulties posed by the past data in the analysis are highlighted and tackled in an interesting way.

Details

International Journal of Quality & Reliability Management, vol. 20 no. 4
Type: Research Article
ISSN: 0265-671X

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Book part
Publication date: 20 August 2018

Amit Mitra

Two-dimensional warranty policies exist for certain consumer products, such as automobiles. Here, warranty is specified in terms of the time since the sale of the product as well…

Abstract

Two-dimensional warranty policies exist for certain consumer products, such as automobiles. Here, warranty is specified in terms of the time since the sale of the product as well as mileage incurred during that period. Thus, at the time of purchasing the product, the manufacturer may offer a warranty of three years or 30,000 miles, whichever occurs first. Failures in the product within this specified period of time or mileage will be covered by the manufacturer.

In this chapter, we consider the scenario of enterprise warranty programs, where customers are given the option of extending the original warranty. Thus, the buyer could be given an option to purchase a five year—50,000 mile warranty, whichever occurs first. Of course, the buyer will be expected to pay a premium to purchase this extended warranty. Such enterprise warranty programs are also found in other consumer durables, such as refrigerators, washers, dryers, and cooking ranges.

This chapter explores determination of the decision variables, such as product price, warranty time, and usage limit under the original conditions and further, for the enterprise warranty, that is, the extended warranty time and extended usage limit, as well as the premium to be charged to the buyer who selects the extended warranty. Mathematical models are developed based on maximizing the expected unit profit by selecting an enterprise warranty program. Additionally, some other objectives are also considered based on the proportional increase in the expected unit profit due to the increased market share attained through the offering of an enterprise warranty program. Some results are obtained through consideration of various goal values of the chosen objectives.

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Article
Publication date: 1 February 1996

Jaroslav Mackerle

Presents a review on implementing finite element methods on supercomputers, workstations and PCs and gives main trends in hardware and software developments. An appendix included…

677

Abstract

Presents a review on implementing finite element methods on supercomputers, workstations and PCs and gives main trends in hardware and software developments. An appendix included at the end of the paper presents a bibliography on the subjects retrospectively to 1985 and approximately 1,100 references are listed.

Details

Engineering Computations, vol. 13 no. 1
Type: Research Article
ISSN: 0264-4401

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