Optimal Warranty Length for a Multi-Component System with Failure Interaction  
Author Minjae Park


Co-Author(s) Bermawi K. Iskandar; Ki Mun Jung; Dong Ho Park


Abstract This paper proposes a new two-dimensional warranty policy based on two factors—age and usage—that simultaneously incorporates both the warranty period and the refund period for a repairable product with an increasing failure rate. In this policy, the product is warranted by taking into account both its age and usage, and the warranty expires when the product reaches a specified age or a specified usage, whichever comes first. One unique framework of the policy presented in this work is that, under a specific type of lemon law, it defines a refund period during which the manufacturer must offer a refund to the buyer if the product fails in such a way that meets certain conditions involving either the number of failures or the length of repair time. The refund period is generally assumed to be shorter than the warranty period, and each failure that occurs after the refund is only minimally repaired until the termination of the warranty. Under a specified cost structure, we evaluate the expected total warranty cost during the age-based warranty period and determine an optimal age-based warranty length from the manufacturer's perspective. Finally, relevant numerical examples are provided to analyze the proposed warranty policy.


Keywords Age-based warranty period; Lemon law; Manufacturer's perspective; Optimal warranty period; Preventive maintenance; Two-dimensional warranty policy
    Article #:  RQD28-180

Proceedings of 28th ISSAT International Conference on Reliability & Quality in Design
August 3-5, 2023