Warranty Data Analysis: A Review

Warranty claims and supplementary data contain useful information about product quality and reliability. Analysing such data can therefore be of benefit to manufacturers in identifying early warnings of abnormalities in their products, providing useful information about failure modes to aid design modification, estimating product reliability for deciding on warranty policy and forecasting future warranty claims needed for preparing fiscal plans. In the last two decades, considerable research has been conducted in warranty data analysis (WDA) from several different perspectives. This article attempts to summarise and review the research and developments in WDA with emphasis on models, methods and applications. It concludes with a brief discussion on current practices and possible future trends in WDA

Design, Structure and Implementation of a Modern Deposit Insurance Scheme

One of the important consequences to be drawn from the course of the financial crisis up to now is the insight that more attention must be paid in the future to the factors of liquidity, liquidity management and liquidity protection. That holds true for the protection of the stability of an individual bank as it does for that of a whole national or even international financial system. The liquidity problems of a bank can certainly have a variety of causes. However, as an examination of the history of bank insolvencies and financial crises shows, an accelerated withdrawal of bank deposits by unsecured customers nearly always leads in the end to the collapse of an institution and, as an ultimate consequence, to a national or even international banking crisis. This insight has also brought the deposit insurance institutions in many countries around the world to the attention of political, regulatory and banking management discussions. The rapid, politically necessary, factually often not well founded, guarantee promises made by many governments have shown those responsible that in Europe the need for a fundamental revision of the present deposit insurance schemes must be urgently addressed. In most industrialized countries of the OECD, as well as in a range of other states, working groups are studying the necessary revisions and adjustments of the relevant institutions to meet the new economic and political conditions. Even if solutions of this sort continue to be arranged differently from one country to another on the basis of differing regulatory, historical and structural circumstances, a consensus is emerging over the important basic questions of deposit insurance system design and architecture. As a result of the worldwide financial crisis most European countries massively increased their coverage limits for their national deposit insurance schemes in the fall of 2008. Where no deposit insurance existed, it was introduced. Existing systems were critically scrutinized. In most countries the maximum insurance coverage was raised and the eligible deposit base was extended. Some individual states have even promised an unlimited deposit protection (in some cases with a time restriction). Under the pressure of an increasing number of bank failures these promises were made without revising the existing deposit insurance schemes themselves. In the course of 2009, both the individual European states and the EU itself then set about scrutinizing their existing protection schemes and mechanisms and revising the existing national deposit insurance schemes. It is accepted throughout the world that well designed deposit insurance is an important element in a national safety net for maintaining and extending the stability of the financial system. The design and structure, but also the implementation, of a deposit insurance scheme (DIS) of this sort throws up numerous institutional, procedural and instrumental questions. Such operative and strategic issues must be answered against the background of the overall national circumstances and in line with the country specific realities of the respective financial intermediate system. However, there is a series of topics that can be assessed and solved independently of such individual circumstances. This is even more the case since the worldwide revision of the deposit insurance schemes offers the opportunity to create the conditions for a future harmonization of national deposit insurance schemes at least within Europe. An assimilation of this sort is, in turn, the basis for future EU-wide or perhaps even European depositor protection, which, like any broadly based guarantee, would certainly be more efficient than a multitude of national solutions. This publication intends to make a contribution to the ongoing discussion of the complex questions connected with the further development of European deposit insurance schemes. Both complementing and extending the broad range of theoretical literature available, it focuses on some key design questions of modern deposit insurance schemes, on the discussion of their basic structural elements and on the appropriate consequences for the stakeholders in deposit insurance. We focus on: - the derivation of the most important requirements of a modern European deposit insurance, and the - discussion of specific organizational aspects and fundamental institutional requirements as well as of solutions for selected system building blocks. The first chapter analyzes the institutional framework of deposit insurance schemes and its various aspects of cost/benefit considerations. The second chapter discusses the fundamentals of modern deposit insurance. The third chapter examines selected strategic and instrumental questions concerning the organization and implementation of deposit insurance schemes. The fourth chapter focuses on some questions related to the international harmonization and coordination of the design of deposit insurance schemes. In all sections we address some lessons learned from the recent financial turmoil. The fifth chapter finally addresses some conclusions and sketches some policy implications for designing and implementing a modern deposit insurance scheme.Deposit insurance, risk-based premium, risk-adjusted pricing, premium calculator, system risk, fund size, funding, guarantee promises, depositor categories, eligible deposits, covered deposits, membership, expected loss, pan-european deposit insurance system, moral hazard, resolution regime, payout

Country Image, Perceived Product Quality and Purchase Intention: the Moderating Roles of Quality Warranty Certificate and Country-Image Transferred Strategies

This article aims at researching on the relationship of country image and customer perception on product quality and purchasing intention in South Korean. Additionally, the moderating roles of product quality warranty and country image transferred strategies are also taken into investigation in this empirical research. In order to make a research on these areas, questionnaire forms were distributed by emails and sending hard copies to 350 target samples in South Korea including Koreans and foreigners who have been living in South Korea and 215 forms were returned back and analyzed by SPSS v.21. The results indicated that gender, age groups and nationalities can significantly influence consumers' perception on the relationship country image and product quality. Surprisingly, the image of origin country produced products does not really affect consumers' perceived product quality, but the image of manufacturing country has a strong and significant influence on consumers' perception in terms of product quality. More interestingly, country image transferred strategy is ineffective in altering consumers' psychological perceptions on country image and perceived product quality. Apart from this, product quality warranty is still workable for boosting consumers' confidence in consuming products in Korean context. Even though this empirical research was considerably and carefully implemented, there are still some significant limitations in practice. The limitations and suggestion are finally introduced and explained

The Easy Case for Products Liability: A Response to Polinsky & Shavell

In their article “The Uneasy Case for Product Liability,” Professors Polinsky and Shavell assert the extraordinary claim that there should be no tort liability - none at all - for injuries caused by widely-sold products. In particular, they claim to have found convincing evidence that the threat of tort liability creates no additional incentives to safety beyond those already provided by regulatory agencies and market forces, and that tort compensation adds little or no benefit to injury victims beyond the compensation already provided by various forms of insurance. In this response, we explain that, even on its own narrow terms, “Uneasy,” comes nowhere near to demonstrating what it purports to demonstrate. We also identify various “benefits” provided by tort liability for product-related injuries that Polinsky and Shavell entirely fail to consider. In fact, the case for some form of products liability - whether fault-based or defect-based - is really quite easy

Coase and Car Repair: Who Should Be Responsible for Emissions of Vehicles in Use?

This paper examines the current assignment of liability for in-use vehicle emissions and suggests some alternative policies that may reduce the cost and increase the effectiveness. The authors first discuss the cost, performance and incentives under current Inspection and Maintenance (I/M) programs, using the recently implemented Arizona "Enhanced I/M" program as an example. These programs were designed to identify and repair vehicles with malfunctioning emission control systems. Since their inception, however, I/M programs have been plagued by transaction costs that have drastically raised the cost of I/M as well as limited its effectiveness. These transaction costs fall into three categories: emission monitoring, repair avoidance, and non-transferability of emission reductions. The authors argue that most of these transaction costs can be attributed to the current assignment of liability for I/M to motorists, and they examine the potential for other liability assignments to reduce transaction costs and improve program efficiency. Among the alternative institutional arrangements discussed are greater imposition of liability on manufacturers, emission repair subsidies, repair liability auctions, and vehicle leasing.

Myopia, customer returns and the theory of planned behaviour

As a prevalent and growing form of customer behaviour, deshopping is on the rise. Retailers' focus on good customer service and the offering of lenient returns polices has led to the growth in this fraudulent behaviour of customers in returning goods. This paper considers retailer myopia in the context of dishonest customer returns, applying the Theory of Planned Behaviour (TPB) using a quantitative questionnaire with 535 female consumers. The findings highlight the extent of the behaviour with 50% admitting to partaking in deshopping. The TPB variables can be utilised to manage and prevent deshopping. The results indicate that currently these customers perceive it to be easy to deshop as there are no consequences with the result that such behaviour continues to grow. If retailers were less myopic they would monitor returns more thoroughly and make it less easy for such customers to get away with undesirable deshopping behaviour. The paper makes recommendations for retailers to manage or alter perceived behavioural characteristics for customers, which in turn, would reduce tendencies for dishonesty in customers returning goods for refunds. Retail myopia is evident with deshopping behaviour with consequences for retailers in time, effort and costs

A system perspective on warranty problems within a supply chain

Thesis (S.M.)--Massachusetts Institute of Technology, System Design and Management Program, February 2005 [first author]; and, (S.M.)--Massachusetts Institute of Technology, System Design and Management Program, February 2006 [second author].Includes bibliographical references (p. 111-113).Warranty is important financially to American manufacturers, especially automotive companies. Carmakers and suppliers must work aggressively to improve their warranty management approach as warranty cost often equals or exceeds their investment in engineering. This thesis focuses on studying warranty management in a supply chain from a systems perspective. Warranty data in the automotive industry, focused upon a "Tier one" supplier, is analyzed to obtain general warranty trends and typical failure types. Following the data analysis and hypothesis formation, a sequential series of surveys and interviews within the supplier are conducted in attempt to determine the root causes of warranty failures. A major finding of the study is the lack of a cross-company and long-term approach for dealing with warranty. Other root causes (though not as deeply imbedded as that noted first) include the lack of design discipline, design knowledge, and resources in the product development process. In addition, unclear accountability, poor communication, and lack of a supplier management process delay the warranty resolution process. Furthermore, the culture and mindset in an organization is a critical element in effective warranty management. A reactive warranty firefighting mindset is inadequate to attack the significant warranty issues. Based upon solving the root causes found in the research, the thesis provides five specific recommendations. These recommendations appear likely to be useful to a wide variety of automotive companies as well as manufacturers in other industries.by Wei Shen and Wangquan (Winston) Cheng.S.M