Two-Dimensional Warranty Policies – Decision Making Under Multiple Objectives

Amitava Mitra; Jayprakash G. Patankar

doi:10.1108/S0276-8976(2012)0000015013

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Applications of Management Science

ISSN: 0276-8976
Series editor(s): Professor Kenneth D. Lawrence

Subject Area: Management Science/Management Studies

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Two-Dimensional Warranty Policies – Decision Making Under Multiple Objectives

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Title:	Two-Dimensional Warranty Policies – Decision Making Under Multiple Objectives
Author(s):	Amitava Mitra, Jayprakash G. Patankar
Volume:	15 Editor(s): Kenneth D. Lawrence, Gary Kleinman ISBN: 978-1-78052-100-8 eISBN: 978-1-78052-101-5
Citation:	Amitava Mitra, Jayprakash G. Patankar (2012), Two-Dimensional Warranty Policies – Decision Making Under Multiple Objectives, in Kenneth D. Lawrence, Gary Kleinman (ed.) Applications of Management Science (Applications of Management Science, Volume 15), Emerald Group Publishing Limited, pp.207-227
DOI:	10.1108/S0276-8976(2012)0000015013 (Permanent URL)
Publisher:	Emerald Group Publishing Limited
Article type:	Chapter Item
Abstract:	Two-attribute warranty policies are considered that incorporate, for example, the time elapsed since sale of the product and product usage at a given point in time. Such policies occur in consumer products, such as automobiles, where warranty may be exercised if both time and usage are within specified warranty parameters when a product failure occurs. In this chapter, it is assumed that usage and product age are related through a random variable, the usage rate, which may have a certain probabilistic distribution as influenced by consumer behavior patterns. Product quality is modeled through the product failure rate, which is influenced by unit research and development expenditures as well as the usage rate and product age. The attained market share of the product is modeled as a function of the warranty policy parameters of price, warranty time, and usage limit, with product quality also having an influence. Attainment of single and multiple objectives are explored. Such objectives encompass expected total unit costs as a proportion of unit product price and market share.