Using a new warranty policy to define optimum values for burn-in and warranty periods

Abstract

In recent years, offering warranty services has become a regular practice in the selling process. Manufacturers try to offer suitable warranty services on their products as an efficient tool to attract new customers and satisfy their current customers. The failure rate curve of many systems shows a bathtub shape with three distinguishable phases. In the first phase, it shows a decreasing rate. During this phase, manufacturers use burn-in methods to eliminate products with early failures. In the second phase, where the curve shows approximately a flat rate, manufacturers offer warranty services. These services assure consumers about the manufacturer's support for the purchased products in case they face failure during the warranty period. In this study, a non-repairable component with a bathtub-shaped failure rate function is considered. In the first phase, if a component fails during the burn-in period, the manufacturer replaces it with a new component. In the second phase, the manufacturer offers a new pro-rata warranty service if a component fails. Considering these assumptions, a cost model is constructed and optimal burn-in time and warranty period are obtained. A numerical illustration is presented to evaluate the impact of the proposed model by calculating the optimum values of burn-in and warranty periods.