A Study on Optimal Warranty Period for Repairable Weapon Systems

Abstract

To the manufacturers, the warranty period is an important decision to make as it involves warranty costs. Although it can be decided by considering marketing strategy in general consumer product industry, it is relatively difficult to decide an adequate period of warranty for a G2B transaction. In this study, we have analyzed the life (failure–time) distribution for each item traded in G2B transactions. Also, their warranty costs based on warranty terms were calculated by applying the Warranty-Cost models. Finally, an optimal warranty period was determined for each item by applying a sale–A/S expenditure limit ratio. As a result, the necessity of setting different warranty policies and periods has been confirmed and established a basis for providing a reasonable warranty terms in the future for similar products.