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Promotional Warranty Policies: Analysis and Perspectives

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Springer Handbook of Engineering Statistics

Part of the book series: Springer Handbooks ((SHB))

Abstract

Warranty is a topic that has been studied extensively by different disciplines including engineering, economics, management science, accounting, and marketing researchers [7.1, p. 47]. This chapter aims to provide an overview on warranties, focusing on the cost and benefit perspective of warranty issuers.

After a brief introduction of the current status of warranty research, the second part of this chapter classifies various existing and several new promotional warranty policies to extend the taxonomy initiated by Blischke and Murthy [7.2].

Focusing on the quantitative modeling perspective of both the cost and benefit analyses of warranties, we summarize five problems that are essential to warranty issuers. These problems are: i) what are the warranty cost factors; ii) how to compare different warranty policies; iii) how to analyze the warranty cost of multi-component systems; iv) how to evaluate the warranty benefits; v) how to determine the optimal warranty policy.

A list of future warranty research topics are presented in the last part of this chapter. We hope that this will stimulate further interest among researchers and practitioners.

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Abbreviations

CMW:

combination warranty

DWC:

discounted warranty cost

EDWC:

expected discounted warranty cost

EWC:

expected warranty cost

FRPW:

free repair warranty

FRW:

free replacement warranty

FSW:

full-service warranty

PRW:

pro-rata warranty

RCLW:

repair-cost-limit warranty

RNLW:

repair-number-limit warranty

RTLW:

repair-time-limit warranty

VaR:

value at risk

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Authors and Affiliations

  1. Card Services, JP Morgan Chase, DE1-1073, 301 Walnut Street, 19801, Wilmington, DE, USA

    Jun Bai

  2. Department of Industrial and Systems Engineering, Rutgers University, 96 Frelinghuysen Road, 08854, Piscataway, NJ, USA

    Hoang Pham

Authors
  1. Jun Bai
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  2. Hoang Pham
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Correspondence to Jun Bai or Hoang Pham .

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Editors and Affiliations

  1. Department of Industrial and Systems Engineering, Rutgers the State University of New Jersey, 96 Frelinghuysen Road, 08854, Piscataway, NJ, USA

    Hoang Pham Prof.

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Bai, J., Pham, H. (2006). Promotional Warranty Policies: Analysis and Perspectives. In: Pham, H. (eds) Springer Handbook of Engineering Statistics. Springer Handbooks. Springer, London. https://doi.org/10.1007/978-1-84628-288-1_7

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  • DOI: https://doi.org/10.1007/978-1-84628-288-1_7

  • Publisher Name: Springer, London

  • Print ISBN: 978-1-85233-806-0

  • Online ISBN: 978-1-84628-288-1

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