I. Djamaludin

New product warranty: A literature review

Warranty is an important element of marketing new products as better warranty signals higher product quality and provides greater assurance to customers. Servicing warranty involves additional costs to the manufacturer and this cost depends on product reliability and warranty terms. Product reliability is influenced by the decisions made during the design and manufacturing of the product. As such warranty is very important in the context of new products. Product warranty has received the attention of researchers from many different disciplines and the literature on warranties is vast. This paper carries out a review of the literature that has appeared in the last ten years. It highlights issues of interest to manufacturers in the context of managing new products from an overall business perspective

Warranty and discrete preventive maintenance

Preventive maintenance actions over the warranty period have an impact on the warranty servicing cost to the manufacturer and the cost to the buyer of fixing failures over the life of the product after the warranty expires. However, preventive maintenance costs money and is worthwhile only when these costs exceed the reduction in other costs. The paper deals with a model to determine when preventive maintenance actions (which rejuvenate the unit) carried out at discrete time instants over the warranty period are worthwhile. The cost of preventive maintenance is borne by the buyer

Quality-Control Through Lot-Sizing for Items Sold with Warranty

Due to manufacturing variability, a fraction of the items produced are non-conforming - i.e. they do not meet the design specifications. The performance of a non-conforming item is inferior to that of a conforming item which meets the design specification. When items are sold with warranty, the warranty cost to service non-conforming items is much bigger than that for conforming items. The production of non-conforming items can be controlled through lot sizing. Smaller lot size results in a reduction in the warranty cost per item but this is achieved at the expense of increased manufacturing cost per unit. In this paper, we discuss the optimal lot sizing which achieves a proper trade-off between the two costs for repairable items sold with free replacement warranty (FRW) policy.

Warranty and preventive maintenance

For products sold with warranty, preventive maintenance actions by manufacturers and/or buyers have an impact on the total costs for both parties. This paper develops a framework to study preventive maintenance actions when items are sold under warranty and reviews the models that have appeared in the literature. It then develops a new model and carries out its analysis.

Lot sizing and testing for items with uncertain quality

We consider the problem where items are produced in lots and sold with warranty. Due to manufacturing variability, some items do not conform to the design specifications and their performance is inferior (for example, have higher failure rate). The warranty servicing cost for these is much higher than for those which conform. Two approaches have been advocated for reducing the warranty cost per item released and in both it is achieved at the expense of increased manufacturing cost. The first involves life testing to weed out nonconforming items and the second involves strategies to reduce nonconforming items being produced. In this paper, the authors develop a model which combines both approaches and quality control decisions are made optimally to minimize the total (manufacturing and warranty) cost. It extends the earlier models of the authors which deals with quality decisions based solely on either the first or the second approach.

Warranty cost analysis with heterogenous usage intensity

Models for cost analysis of one-dimensional warranty policies assume that the usage intensity (or rate) is the same for all users. In real life the usage intensity varies across the population of users. This paper deals with some simple models to study the expected warranty cost for products sold with free replacement warranty with varying usage intensity. International Federation of Operational Research Societies 2001.

Quality control in a single state production system: open and closed loop policies

SUMMARY The output quality in a single state production system depends on the input quality and the machine state. The machine state deteriorates with production and affects output quality. The deterioration, and hence output quality can be controlled through proper maintenance actions. This paper formulates a model and examines optimal open and closed loop policies for carrying out such maintenance actions.

Warranty and Quality

Warranty is an important element in the marketing of new products, and warranty results in additional cost to the manufacturer. The warranty servicing cost is influenced by design quality, manufacturing quality, and service quality. This paper deals with this link and reviews the literature linking warranty and quality. It concludes with a brief discussion of topics for future research.

Lot Sizing and Life Testing for Quality Improvement of Items Sold with Warranty

Due to manufacturing variability, a fraction of items produced fail to conform to the design specification. The performance of such items is inferior compared to those which conform. As a result, non-conforming items have a significant impact on the expected warranty service cost when items are sold with warranty. This cost can be reduced through effective quality control. In this chapter we develop a model which uses testing (for weeding out non-conforming items) and lot sizing (to reduce the occurrence of non-conforming items) for improving quality when items are produced in lots. Unfortunately, the reduction in the expected warranty servicing cost is achieved at the expense of increased manufacturing cost. The model examines a quality improvement scheme which achieves a balance between these two costs.