Warranty Cost Analysis with an Alternating Geometric Process

Arnold, R
Chukova, S
Hayakawa, Y
Marshall, S
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In this study we model the warranty claims process and evaluate the warranty servicing costs under non-renewing and renewing free repair warranties. We assume that the repair time for rectifying the claims is non-zero and the repair cost is a function of the length of the repair time. To accommodate the ageing of the product and repair equipment, we use a decreasing geometric process to model the consecutive operational times and an increasing geometric process to model the consecutive repair times. We identify and study the alternating geometric process (AGP), which is an alternating process with cycles consisting of the item’s operational time followed by the corresponding repair time. We derive new results or the AGP in finite horizon and use them to evaluate the warranty costs over the warranty period and over the life cycle of the product under a non-renewing free repair warranty (NRFRW), a renewing free repair warranty (RFRW) and a restricted renewing free repair warranty (RRFRW(n)). Properties of the model are demonstrated using a simulation study.

Warranty cost analysis; Geometric process; Alternating geometric process
2018 Asia-Pacific International Symposium on Advanced Reliability and Maintenance Modeling (APARM 2018) & 2018 International Conference on Quality, Reliability, Risk, Maintenance, and Safety Engineering (QR2MSE 2018) August 21-24, 2018, Qingdao, Shandong, China.
arXiv:1804.06707 [q-fin.GN], (or arXiv:1804.06707v1 [q-fin.GN] for this version)
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