Naval Research Logistics (NRL) · 1997 · 63 citations · 0 references
EngineeringQuality ManagementOptimizationProduction PlanningWarrantiesCost FunctionsFailure CriteriaReliability ModelingParametric Cost FunctionsProduct Failure RatesProduction Cost FunctionsWarranty Cost AnalysisWarranty ManagementWarranty Policy Design
Warranty is a critical factor for consumer durable products, yet its cost can significantly reduce profitability, and burn‑in procedures, while improving quality, also add expense. The study seeks to formulate and optimize cost functions that jointly account for burn‑in procedures and warranty policies. The authors develop several cost functions incorporating burn‑in and warranty parameters and apply optimization techniques to identify optimal strategies. The optimal burn‑in times that minimize these cost functions never exceed the first change point of the bathtub‑shaped failure‑rate function and depend continuously on model parameters and the underlying distribution. © 1997 John Wiley & Sons, Inc., Naval Research Logistics 44:199–209.
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