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

Failure analysis and warranty modeling of used cars

Reliability is an important aspect of product perception and manufacturers are compelled to take corrective actions on the items failing within the warranty period. Automotive manufacturers are being exposed to significant operating costs as a result of warranty claims affecting an individual unit or mandatory (sometimes voluntary) recalls affecting a batch. Underlying principles of warranty modeling are built by considering both subjective issues and objective constraints such as competition, quality, and performance under the goal of achieving desired levels of reliability and cost in a balanced manner. This paper reviews the warranty cost models with an emphasis on the failure analysis of used vehicles. Expected warranty costs are calculated by taking into account the age, usage, and maintenance data of the product in question. Failure intensities and characteristics are identified in order to propose a policy that highlights the trade-off between the cost and the warranty length. A case study on a popular brand's initiation of factory certified pre-owned program for the local automobile market of Turkey is presented in detail. (C) 2011 Elsevier Ltd. All rights reserved.Publisher's VersionAuthor Post Prin

Warranty and Sustainable Improvement of Used Products through Remanufacturing

Currently, a large number of used/second-hand products are being sold with remanufacturing. Remanufacturing is a process of bringing used products to a better functional state and can be applied as a way for (1) controlling the deterioration process, (2) reducing the likelihood of a failure over the warranty period and (3) making the used item effectively younger. Remanufacturing is relatively a new concept and has received very limited attention. In this paper, we develop an important sustainable improvement approach for used items sold with failure free warranty to determine the optimal improvement level. Our model makes a useful contribution to the reliability growth literature, as it captures the uncertainty and suggests improvement in the remanufacturing process. By using this model, the dealers can decide whether and how much to invest in remanufacturing projects

Modeling and Analysis of Effective Ways for Improving the Reliability of Second-hand Products Sold with Warranty

Often, customers are uncertain about the performance and durability of the used/second-hand products. The warranties play an important role in reassuring the buyer. Offering the warranty implies that the dealer incurs additional costs to service any claims made by the customers. Reducing warranty costs is an issue of great interest to dealers. One way of improving the reliability and reducing the warranty servicing cost for second-hand items is through actions such as overhaul and upgrade which are carried out by the dealer or a third party. Improving actions allow the dealer to offer better warranty terms and to sell the item at a higher price. This paper deals with two effective approaches (virtual age approach and screening test approach) to decide on the reliability improvement strategies for second-hand products sold under various warranty policies (failure-free, rebate warranty, and a combination of free replacement and lump sum). A numerical example illustrates that from a dealer’s point of view, it is beneficial to carry out an improvement action only if the reduction in the warranty servicing cost is greater than the extra cost incurred due to this improvement action

Two-dimensional Warranty Cost Analysis for Second-hand Products

In spite of the recent steady increase of the volume of the second-hand markets, often customers remain in doubt regarding the quality and durability of the secondhand products. Aiming to reduce and share this uncertainty, dealers offer warranty on their products. Offering warranty for second-hand products is a relatively new marketing strategy employed by dealers of used electronic equipment, furniture, automobiles, etc. Usually, for used products, the dealer’s expected warranty cost is a function of product reliability, past age and usage, servicing strategy and conditions and terms of the warranty policy/contract. Sometimes the offered policy is limited by two parameters, typically the product age and usage after the sale. This type of policies is referred to as two-dimensional warranty policies. In this article, we develop statistical models for estimating the dealer’s expected warranty cost for second-hand products sold with two-dimensional free repair/replacement warranty

Optimal Warranty Period for Free-replacement Policy of Agm Batteries

The objective of this study is to analyze the suitability of the age-based warranty model and a millage based warranty model for absorbent glass mat batteries (AGM) for the automobile industry. The battery life expectancy can be assessed and described by a combination of different terms such as: state of health (SOH), deep of discharge (DOD), state of energy (SOE) and state of charge (SOC). However, using actual data from the field, the implementation of reliability engineering and statistical modeling we aim to calculate optimal limits for warranty policies that minimize warranty costs. The outcomes of this research will enable battery manufacturers, motor companies and warranty managers in decisions making strategies for cost savings in warranty projects without negatively affecting customer satisfaction

Warranty Period and Product Price Optimization for Remanufactured Products

This study considers a remanufactured electrical product under a tiered warranty policy. Warranty is key in ensuring a good manufacturer—consumer relationship. Manufacturers hope to minimize warranty costs while consumers believe that good warranty promises better product quality and reliability. This Thesis presents an optimal warranty period from the perspective of a manufacturer to maximize the total expected profits, while ensuring sustained consumer relation. We use real data from a local company with a global supply chain to provide a numerical example

Determination of optimal pricing and warranty policies

An important problem facing manufacturers in today\u27s competitive market is the determination of the selling price of a product and its warranty period. A longer warranty may serve as a signal of product reliability; however, it may also lead to an increase in cost and hence reduce the profit if the product reliability is low. A burn-in test may be used to improve the reliability of products prior to their shipment.;This research presented integrated models for maximizing the expected profit for products that are subjected to a burn-in test and sold with warranty. The burn-in time, warranty period, and price were chosen as three decision variables in these models. The price and warranty period were treated as marketing variables and a simple multiplicative form was used to model their effect on sales. Solution procedures were developed for several warranty policies. These procedures are applicable for any failure time distribution. Three failure time distributions were further investigated and formulas for optimal solutions were derived. Finally, two sets of data were used to illustrate the application of the models. Two computer programs were developed to solve the models both parametrically and nonparametically

Warranty prediction during product development: Developing an event generation engine

In 2010, high tech industries including computer makers, peripherals manufacturers, and medical equipment manufacturers spent a total of $8 billion on warranty. Reducing warranty costs improves the manufacturer\u27s profit and helps to reduce the overall cost of the product. An often cited principle is that approximately 80% of the eventual product cost is \u27locked in\u27 during the very early stages of product development, however, traditional methods of warranty analysis are not well suited to predict the warranty costs during these early stages. Thus, product development personnel need better tools to make good predictions about the warranty costs so that they can make better decisions to reduce warranty earlier in product development. In order to address this gap, previous research defined a warranty prediction framework, which at its core was a warranty event generation engine that integrated the disparate data sources available early in the product development process. The objective of this work was to create this event generation model, which would give the probability of occurrence for a warranty event, given the length of time of service for the system. The model developed in this work used different data sources namely, field data, product development data and engineering judgment data from our industrial partner. The datasets were then combined using a two-stage numerical Bayes method to predict the probability of occurrence of an event. Various test cases were created, by using the different datasets as priors and likelihoods. The results were then compared to actual field data set to understand how well the model performed. It was found that the model performed well and was able to produce a bounded solution. The future research agenda is to create a tool for product development professionals that will help them predict warranty costs