(A) warranty cost model for repairable consumer product

Abstract

For consumer products, the manufacturer is faced with the administrative problems concerning warranty. Since the warranty affects the price of a product, sales, market share, and profits, the manufacturer wants to know the cost of warranty claims for failure of a product. This study presents a mathematical model of warranty cost for the repairable consumer products in protectional aspect. A general stochastic model of the product failure and associated cost is developed for a sequence of repairs. Assumed that the repaired product does not return to "as new" condition but to the average condition for a working system of its age, a minimal repair is involved. After the expressions are obtained for the s-expectation and variance of the present worth of the future costs, the prediction interval for warranty reserves is developed. A Weibull distribution of time to failure is also suggested for its reasonable characteristics. Finally, a numerical example and a microcomputer application of this model are presented.