Dynamic Warranty and Reliability Analysis for Repairable Products: A Life-Cycle Approach

Product warranties have been an integral part of production and marketing strategies for a manufacturer to gain market shares and control quality related costs. As product reliability has a great impact on the warranty costs, effective production management must take into account the relationship between warranty and reliability. One major purpose of reliability analysis is to determine the warranty length. The investigators of this project will develop a methodology to investigate a policy that jointly considers product pricing and warranty length for a repairable high-tech product over its effective lifetime. The framework will take into account the relevant aspects including product reliability, different risk preferences of consumers, and the warranty servicing costs for the manufacturer through the entire lifetime of the product. Based on the formulation of a utility function for the consumers, the approach will consider dynamic pricing and dynamic warranty for homogeneous and heterogeneous consumers, respectively.