Warranty cost analysis: quasi‐renewal inter‐repair times

Abstract

PurposeTo provide a brief introduction to warranty analysis and a classification of general repairs. To introduce the notion of accelerated probability distribution and use it to model imperfect warranty repairs.Design/methodology/approachThe notion of accelerated probability distribution is discussed and its similarity with quasi‐renewal and geometric processes is observed. An approach to modeling imperfect warranty repairs based on the accelerated probability distributions is presented, and the corresponding expected warranty cost over the warranty period under non‐renewing free replacement warranty policy is evaluated.FindingsIt is observed that quasi‐renewal and the geometric processes are equivalent. Using data from an existing warranty database it is shown that the inter‐repair times form a quasi‐renewal process. The corresponding expected warranty cost over the warranty period under a non‐renewing free replacement warranty policy is evaluated.Research limitations/implicationsThis approach is applicable only if the cost of the warranty repair is an increasing function of the number of repairs.Practical implicationsProvides a useful approach to modeling inter‐repair times incorporating the idea of imperfect repairs in practice.Originality/valueProvides an approach to model imperfect warranty repairs and to evaluate the corresponding expected warranty cost.