Expected value and variance of warranty cost of repairable product with two types of warranty

Abstract

Considers the estimation problem of the total warranty cost under two types of warranty. The product (e.g. car) is sold under two types of warranty (mileage and age). The failed product will be minimally repaired by the manufacturer during the preassigned warranty, the length of which is determined by mileage or age, whichever occurs first. Under general distributions, obtains the formula of the expected value and variance of total warranty cost. Analyses special cases of the failure and running behaviours. Includes a numerical example.