Cost analysis of two-attribute warranty policies based on the product usage rate

Document Type

Article

Publication Date

1-1-1999

Abstract

In the so-called two-attribute warranty policy, two types of warranty criteria, such as the age and mileage of an automobile, are employed simultaneously to determine the eligibility of a warranty claim. We propose in the paper several decision models that estimate the expected total cost incurred under various types of two-attribute warranty policies. We also perform a sensitivity analysis to study the effects of several model parameters, such as the discount rate, the product usage rate, and the warranty terms, on the total warranty cost.

Publication Source (Journal or Book title)

IEEE Transactions on Engineering Management

First Page

201

Last Page

209

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