MODELING MANUFACTURERS' AND CUSTOMERS' COSTS FOR COST SHARING LIFETIME WARRANTY

Anisur Rahman () and Gopinath Chattopadhyay ()
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Anisur Rahman: Griffith University, Griffith School of Engineering, Parklands Drive, Southport, Qld 4222, Australia
Gopinath Chattopadhyay: CQUniversity Australia, Faculty of Sciences, Engineering and Health Bryan, Jordan Drive, Gladstone, QLD, 4680, Australia

Asia-Pacific Journal of Operational Research (APJOR), 2012, vol. 29, issue 04, 1-16

Abstract: Lifetime warranties are becoming more popular as these types of warranties provide assurance for a longer reliable service life, protection of customers against poor quality and the potential high cost of failure occurring during the long uncertain life of products. Chattopadhyay and Rahman (2008) proposed taxonomy for Lifetime warranty policies and developed cost models for Free rectification lifetime warranty (FRLTW) policies. In line with Chattopadhyay and Rahman, in this paper, stochastic models for two most potential and currently practiced Cost sharing lifetime warranty (CSLTW) policies, Specific parts excluded lifetime warranty and Limit on individual cost lifetime warranty have been developed to estimate the customers' and manufacturers' costs. The developed models capture the uncertainties of lifetime warranty coverage period and implication in offering such warranties on both manufacturer and customers. The developed models are analyzed using illustrative examples considering products with time-dependent failures.

Keywords: Lifetime warranty; product useful life; cost sharing policies (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1142/S0217595912500248

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