Warranty policies and burn‐in

Jie Mi

Naval Research Logistics (NRL), 1997, vol. 44, issue 2, 199-209

Abstract: Warranty is an important factor for consumer durable products in the marketplace. However, the warranty cost may drastically reduce profitability. Burn in is a common procedure to improve the quality of products after they have been produced, but it is also costly. By taking both the burn‐in procedure and warranty policy into consideration, several cost functions can be formulated and optimized. Assuming that the failure‐rate function of the product has a bathtub shape, it is shown that the optimal burn‐in times that minimize the considered cost functions never exceed the first change point of the failure‐rate function. The continuous dependence of the optimal burn‐in times on the model parameters and the underlying distribution is also established. © 1997 John Wiley & Sons, Inc. Naval Research Logistics 44: 199–209, 1997

Date: 1997
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https://doi.org/10.1002/(SICI)1520-6750(199703)44:23.0.CO;2-4

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Persistent link: https://EconPapers.repec.org/RePEc:wly:navres:v:44:y:1997:i:2:p:199-209

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