Warranty claim analysis according to good usage policy

Abstract

Warranty is a term provided by the producer in order to overcome the loss of a company's goodwill if some products fail to perform as expected due to error while in production. In previous works on warranty, it is noted that frequently some products are claimed for warranty due to damage caused by bad usage or lack of knowledge by the user. The cost related to these claims is high and needs to be considered. In this work two models are developed for determining two types of warranty claims using homogeneous Poisson process (HPP), learning rate factor (Chase et al., 1999) and simulation. The two types are fatal failure and intermittent failure of the product. In the last section of the work there is a brief description of a new model which may bring the concept of a variable warranty period of product.