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
Language eng
Subject 2213 Safety, Risk, Reliability and Quality
2209 Industrial and Manufacturing Engineering
2604 Applied Mathematics
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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Citation counts: TR Web of Science Citation Count  Cited 8 times in Thomson Reuters Web of Science Article | Citations
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Created: Thu, 11 Aug 2016, 19:30:35 EST by Rose Clements on behalf of School of Mechanical and Mining Engineering