Calculation of the Cost of Warranty Policies as a Function of Estimated Life Distributions.
Abstract
Two types of warranties are analyzed. These are the free-replacement warranty, under which failed items are replaced free of charge until a specified total operating time has been achieved, and the pro-rata warranty, under which items which fail prior to a specified time are replaced at pro-rata cost to the buyer. Both the buyer's and seller's points of view are considered. The basis of the analysis is a comparison of warrantied and unwarrantied (otherwise identical) items with regard to long-run cost to the buyer and long-run profit to the seller.
Document Details
- Document Type
- Technical Report
- Publication Date
- Oct 01, 1974
- Accession Number
- ADA001015
Entities
People
- Ernest M. Scheuer
- Wallace R. Blischke
Organizations
- University of Southern California