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Customized warranty offering for configurable products

Author

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  • Liu, Yiliu
  • Liu, Zixian
  • Wang, Yukun

Abstract

Although configurable products have been common in the market, buyers often receive standard warranty offerings rather than customized ones from manufacturers. In this study, a reliability based method is proposed to specify warranties for certain product configuration schemes. A continuous time Markov model is adopted to measure the vulnerabilities of components involved in configuration. Then the warranty claim probability of a product with multiple components is calculated, and the warranty costs in varied warranty periods are estimated. Under a minimal repair warranty in which only failed components are replaced free of charge, warranty plans can be customized for different configuration schemes on the basis of warranty costs. Next, an example of laptop computer is introduced to illustrate the procedure and effectiveness of the proposed method. Impacts of operating frequency and operating time of products on warranty costs are also measured. In addition, some recommendations are provided in order to deal with issues of replacement policy, pro-rata rebate warranty (PRW) and compatibility between components.

Suggested Citation

  • Liu, Yiliu & Liu, Zixian & Wang, Yukun, 2013. "Customized warranty offering for configurable products," Reliability Engineering and System Safety, Elsevier, vol. 118(C), pages 1-7.
    • Handle: RePEc:eee:reensy:v:118:y:2013:i:c:p:1-7
    DOI: 10.1016/j.ress.2013.03.007
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    References listed on IDEAS

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    1. D.N. Prabhakar Murthy & Wallace R. Blischke, 2006. "Warranty Management and Product Manufacture," Springer Series in Reliability Engineering, Springer, number 978-1-84628-258-4, January.
    2. Murthy, D. N. P. & Blischke, W. R., 1992. "Product warranty management -- II: An integrated framework for study," European Journal of Operational Research, Elsevier, vol. 62(3), pages 261-281, November.
    3. Blischke, W. R. & Murthy, D. N. P., 1992. "Product warranty management -- I: A taxonomy for warranty policies," European Journal of Operational Research, Elsevier, vol. 62(2), pages 127-148, October.
    4. Murthy, D. N. P. & Djamaludin, I., 2002. "New product warranty: A literature review," International Journal of Production Economics, Elsevier, vol. 79(3), pages 231-260, October.
    5. Murthy, D. N. P. & Blischke, W. R., 1992. "Product warranty management -- III: A review of mathematical models," European Journal of Operational Research, Elsevier, vol. 63(1), pages 1-34, November.
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    Cited by:

    1. Wang, Yukun & Liu, Zixian & Liu, Yiliu, 2015. "Optimal preventive maintenance strategy for repairable items under two-dimensional warranty," Reliability Engineering and System Safety, Elsevier, vol. 142(C), pages 326-333.
    2. Chun Su & Longfei Cheng, 2019. "Two-dimensional preventive maintenance optimum for equipment sold with availability-based warranty," Journal of Risk and Reliability, , vol. 233(4), pages 648-657, August.
    3. Rezapour, Shabnam & Allen, Janet K. & Mistree, Farrokh, 2016. "Reliable product-service supply chains for repairable products," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 95(C), pages 299-321.
    4. Rui Zheng & Chun Su & Yuqiao Zheng, 2020. "Two-stage flexible warranty decision-making considering downtime loss," Journal of Risk and Reliability, , vol. 234(3), pages 527-535, June.

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