Warranty menu design for a two-dimensional warranty

Ye, Zhi-Sheng and Murthy, D. N. Pra (2016) Warranty menu design for a two-dimensional warranty. Reliability Engineering and System Safety, 155 21-29. doi:10.1016/j.ress.2016.05.013

Author Ye, Zhi-Sheng
Murthy, D. N. Pra
Title Warranty menu design for a two-dimensional warranty
Journal name Reliability Engineering and System Safety   Check publisher's open access policy
ISSN 0951-8320
Publication date 2016-11-01
Year available 2016
Sub-type Article (original research)
DOI 10.1016/j.ress.2016.05.013
Open Access Status Not Open Access
Volume 155
Start page 21
End page 29
Total pages 9
Place of publication London, United Kingdom
Publisher Elsevier
Collection year 2017
Language eng
Abstract Fierce competitions in the commercial product market have forced manufacturers to provide customer-friendly warranties with a view to achieving higher customer satisfaction and increasing the market share. This study proposes a strategy that offers customers a two-dimensional warranty menu with a number of warranty choices, called a flexible warranty policy. We investigate the design of a flexible two-dimensional warranty policy that contains a number of rectangular regions. This warranty policy is obtained by dividing customers into several groups according to their use rates and providing each group a germane warranty region. Consumers choose a favorable one from the menu according to their usage behaviors. Evidently, this flexible warranty policy is attractive to users of different usage behaviors, and thus, it gives the manufacturer a good position in advertising the product. When consumers are unaware about their use rates upon purchase, we consider a fixed two-dimensional warranty policy with a stair-case warranty region and show that it is equivalent to the flexible policy. Such an equivalence reveals the inherent relationship between the rectangular warranty policy, the L-shape warranty policy, the step-stair warranty policy and the iso-probability of failure warranty policy that were extensively discussed in the literature.
Keyword Flexible warranty policy
Stair-case warranty
Accelerated failure time model
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: School of Mechanical & Mining Engineering Publications
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Created: Thu, 11 Aug 2016, 09:30:35 EST by Rose Clements on behalf of School of Mechanical and Mining Engineering