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Determination of Bayesian optimal warranty length under Type-II unified hybrid censoring scheme

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  • Tanmay Sen
  • Ritwik Bhattacharya
  • Biswabrata Pradhan
  • Yogesh Mani Tripathi

Abstract

Determination of an appropriate warranty length for the lifetime of the product is an important issue to the manufacturer. In this article, optimal warranty length of the product for the combined free replacement and the pro-rata warranty policy is computed based on the Type-II unified hybrid censored data. A non-linear pro-rata warranty policy is proposed in this context. The optimal warranty length is obtained by maximizing an expected utility function. The expectation is taken with respect to the posterior predictive model for the time-to-failure data. It is observed that the non-linear pro-rata warranty policy gives a larger warranty length with maximum profit as compared to linear warranty policy. Finally, a real-data set is analyzed in order to illustrate the advantage of using non-linear pro-rata warranty policy.

Suggested Citation

  • Tanmay Sen & Ritwik Bhattacharya & Biswabrata Pradhan & Yogesh Mani Tripathi, 2020. "Determination of Bayesian optimal warranty length under Type-II unified hybrid censoring scheme," Papers 2004.08533, arXiv.org.
    • Handle: RePEc:arx:papers:2004.08533
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    References listed on IDEAS

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    2. Jimut Bahan Chakrabarty & Soumya Roy & Shovan Chowdhury, 2019. "Optimum accelerated life test sampling plans for Type-I hybrid censored Weibull distributed products sold under general rebate warranty," Working papers 349, Indian Institute of Management Kozhikode.
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    4. Wu, Chin-Chun & Lin, Pei-Chun & Chou, Chao-Yu, 2006. "Determination of price and warranty length for a normal lifetime distributed product," International Journal of Production Economics, Elsevier, vol. 102(1), pages 95-107, July.
    5. DeCroix, Gregory A., 1999. "Optimal warranties, reliabilities and prices for durable goods in an oligopoly," European Journal of Operational Research, Elsevier, vol. 112(3), pages 554-569, February.
    6. Jimut Bahan Chakrabarty & Shovan Chowdhury & Soumya Roy, 2019. "Optimum life test plan for products sold under warranty having Type-I generalizedhybrid censored Weibull distributed lifetimes," Working papers 302, Indian Institute of Management Kozhikode.
    7. Sonal Budhiraja & Biswabrata Pradhan, 2019. "Optimum reliability acceptance sampling plans under progressive type-I interval censoring with random removal using a cost model," Journal of Applied Statistics, Taylor & Francis Journals, vol. 46(8), pages 1492-1517, June.
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