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Approximating Expected Warranty Costs

Author

Listed:
  • Edward W. Frees

    (Department of Statistics and School of Business, 1155 Observatory Drive, University of Wisconsin, Madison, Wisconsin 53706)

  • Seong-Hyun Nam

    (Department of Statistics and School of Business, 1155 Observatory Drive, University of Wisconsin, Madison, Wisconsin 53706)

Abstract

In this paper, we survey a portion of the literature in the analysis of warranty costs. In order to compare the price of different warranty policies, we review a framework which leads to expressing the expected costs in terms of complex functions arising in renewal theory. These functions and several approximations are discussed. In particular, a straight line approximation performs well.

Suggested Citation

  • Edward W. Frees & Seong-Hyun Nam, 1988. "Approximating Expected Warranty Costs," Management Science, INFORMS, vol. 34(12), pages 1441-1449, December.
    • Handle: RePEc:inm:ormnsc:v:34:y:1988:i:12:p:1441-1449
    DOI: 10.1287/mnsc.34.12.1441
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    Citations

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    Cited by:

    1. Marlin U. Thomas & Sridevi S. Rao, 1999. "Warranty Economic Decision Models: A Summary and Some Suggested Directions for Future Research," Operations Research, INFORMS, vol. 47(6), pages 807-820, December.
    2. Mitra, Amitava & Patankar, Jayprakash G., 1997. "Market share and warranty costs for renewable warranty programs," International Journal of Production Economics, Elsevier, vol. 50(2-3), pages 155-168, June.
    3. Huang, Yeu-Shiang & Gau, Wei-Yo & Ho, Jyh-Wen, 2015. "Cost analysis of two-dimensional warranty for products with periodic preventive maintenance," Reliability Engineering and System Safety, Elsevier, vol. 134(C), pages 51-58.
    4. Jie Mi, 1999. "Comparisons of renewable warranties," Naval Research Logistics (NRL), John Wiley & Sons, vol. 46(1), pages 91-106, February.
    5. Kao, Edward P. C. & Smith, Marion Spokony, 1996. "Computational approximations of renewal process relating to a warranty problem: The case of phase-type lifetimes," European Journal of Operational Research, Elsevier, vol. 90(1), pages 156-170, April.

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