Development of lifetime warranty policies and models for estimating costs

In today's fiercely competitive products market, product warranty has started playing an important role. The warranty period offered by the manufacturer/dealer has been progressively increasing since the beginning of the 20th Century. Currently, a large number of products are being sold with long-term warranty policies in the form of extended warranty, warranty for used products, service contracts and lifetime warranty policies. Lifetime warranties are relatively a new concept. The modelling of failures during the warranty period and the costs for such policies are complex since the lifespan in these policies are not defined well and it is often difficult to tell about life measures for the longer period of coverage due to usage pattern/maintenance activities undertaken and uncertainties of costs over the period. This paper focuses on defining lifetime, developing lifetime warranty policies and models for predicting failures and estimating costs for lifetime warranty policies.

Drivers of technology substitution : successive generations of high tech products

Principal Topic High technology consumer products such as notebooks, digital cameras and DVD players are not introduced into a vacuum. Consumer experience with related earlier generation technologies, such as PCs, film cameras and VCRs, and the installed base of these products strongly impacts the market diffusion of the new generation products. Yet technology substitution has received only sparse attention in the diffusion of innovation literature. Research for consumer durables has been dominated by studies of (first purchase) adoption (c.f. Bass 1969) which do not explicitly consider the presence of an existing product/technology. More recently, considerable attention has also been given to replacement purchases (c.f. Kamakura and Balasubramanian 1987). Only a handful of papers explicitly deal with the diffusion of technology/product substitutes (e.g. Norton and Bass, 1987: Bass and Bass, 2004). They propose diffusion-type aggregate-level sales models that are used to forecast the overall sales for successive generations. Lacking household data, these aggregate models are unable to give insights into the decisions by individual households - whether to adopt generation II, and if so, when and why. This paper makes two contributions. It is the first large-scale empirical study that collects household data for successive generations of technologies in an effort to understand the drivers of adoption. Second, in comparision to traditional analysis that evaluates technology substitution as an ''adoption of innovation'' type process, we propose that from a consumer's perspective, technology substitution combines elements of both adoption (adopting the new generation technology) and replacement (replacing the generation I product with generation II). Based on this proposition, we develop and test a number of hypotheses. Methodology/Key Propositions In some cases, successive generations are clear ''substitutes'' for the earlier generation, in that they have almost identical functionality. For example, successive generations of PCs Pentium I to II to III or flat screen TV substituting for colour TV. More commonly, however, the new technology (generation II) is a ''partial substitute'' for existing technology (generation I). For example, digital cameras substitute for film-based cameras in the sense that they perform the same core function of taking photographs. They have some additional attributes of easier copying and sharing of images. However, the attribute of image quality is inferior. In cases of partial substitution, some consumers will purchase generation II products as substitutes for their generation I product, while other consumers will purchase generation II products as additional products to be used as well as their generation I product. We propose that substitute generation II purchases combine elements of both adoption and replacement, but additional generation II purchases are solely adoption-driven process. Extensive research on innovation adoption has consistently shown consumer innovativeness is the most important consumer characteristic that drives adoption timing (Goldsmith et al. 1995; Gielens and Steenkamp 2007). Hence, we expect consumer innovativeness also to influence both additional and substitute generation II purchases. Hypothesis 1a) More innovative households will make additional generation II purchases earlier. 1 b) More innovative households will make substitute generation II purchases earlier. 1 c) Consumer innovativeness will have a stronger impact on additional generation II purchases than on substitute generation II purchases. As outlined above, substitute generation II purchases act, in part like a replacement purchase for the generation I product. Prior research (Bayus 1991; Grewal et al 2004) identified product age as the most dominant factor influencing replacements. Hence, we hypothesise that: Hypothesis 2: Households with older generation I products will make substitute generation II purchases earlier. Our survey of 8,077 households investigates their adoption of two new generation products: notebooks as a technology change to PCs, and DVD players as a technology shift from VCRs. We employ Cox hazard modelling to study factors influencing the timing of a household's adoption of generation II products. We determine whether this is an additional or substitute purchase by asking whether the generation I product is still used. A separate hazard model is conducted for additional and substitute purchases. Consumer Innovativeness is measured as domain innovativeness adapted from the scales of Goldsmith and Hofacker (1991) and Flynn et al. (1996). The age of the generation I product is calculated based on the most recent household purchase of that product. Control variables include age, size and income of household, and age and education of primary decision-maker. Results and Implications Our preliminary results confirm both our hypotheses. Consumer innovativeness has a strong influence on both additional purchases (exp = 1.11) and substitute purchases (exp = 1.09). Exp is interpreted as the increased probability of purchase for an increase of 1.0 on a 7-point innovativeness scale. Also consistent with our hypotheses, the age of the generation I product has a dramatic influence for substitute purchases of VCR/DVD (exp = 2.92) and a strong influence for PCs/notebooks (exp = 1.30). Exp is interpreted as the increased probability of purchase for an increase of 10 years in the age of the generation I product. Yet, also as hypothesised, there was no influence on additional purchases. The results lead to two key implications. First, there is a clear distinction between additional and substitute purchases of generation II products, each with different drivers. Treating these as a single process will mask the true drivers of adoption. For substitute purchases, product age is a key driver. Hence, implications for marketers of high technology products can utilise data on generation I product age (e.g. from warranty or loyalty programs) to target customers who are more likely to make a purchase.

A comparative study of manufacturing practices and performance variables

The reported study was conducted to compare and contrast current manufacturing practices between two countries, Australia and Malaysia, and identify the practices that significantly influence their manufacturing performances. The results are based on data collected from surveys using a standard questionnaire in both countries. Evidence indicates that product quality and reliability is the main competitive factor for manufacturers. Maintaining a supplier rating system and regularly updating it with field failure and warranty data and making use of product data management are found to be effective manufacturing practices. In terms of the investigated manufacturing performance, Australian manufacturers are marginally ahead of their Malaysian counterparts. However, Malaysian manufacturers came out ahead on most dimensions of advanced quality and manufacturing practices, particularly in the adoption of product data management, effective supply chains and relationships with suppliers and customers.

Drivers of adoption for successive generation of high-tech products

To understand the diffusion of high technology products such as PCs, digital cameras and DVD players it is necessary to consider the dynamics of successive generations of technology. From the consumer’s perspective, these technology changes may manifest themselves as either a new generation product substituting for the old (for instance digital cameras) or as multiple generations of a single product (for example PCs). To date, research has been confined to aggregate level sales models. These models consider the demand relationship between one generation of a product and a successor generation. However, they do not give insights into the disaggregate-level decisions by individual households – whether to adopt the newer generation, and if so, when. This paper makes two contributions. It is the first large scale empirical study to collect household data for successive generations of technologies in an effort to understand the drivers of adoption. Second, in contrast to traditional analysis in diffusion research that conceptualizes technology substitution as an “adoption of innovation” type process, we propose that from a consumer’s perspective, technology substitution combines elements of both adoption (adopting the new generation technology) and replacement (replacing generation I product with generation II). Key Propositions In some cases, successive generations are clear “substitutes” for the earlier generation (e.g. PCs Pentium I to II to III ). More commonly the new generation II technology is a “partial substitute” for existing generation I technology (e.g. DVD players and VCRs). Some consumers will purchase generation II products as substitutes for their generation I product, while other consumers will purchase generation II products as additional products to be used as well as their generation I product. We propose that substitute generation II purchases combine elements of both adoption and replacement, but additional generation II purchases are solely adoption-driven process. Moreover, drawing on adoption theory consumer innovativeness is the most important consumer characteristic for adoption timing of new products. Hence, we hypothesize consumer innovativeness to influence the timing of both additional and substitute generation II purchases but to have a stronger impact on additional generation II purchases. We further propose that substitute generation II purchases act partially as a replacement purchase for the generation I product. Thus, we hypothesize that households with older generation I products will make substitute generation II purchases earlier. Methods We employ Cox hazard modeling to study factors influencing the timing of a household’s adoption of generation II products. A separate hazard model is conducted for additional and substitute purchases. The age of the generation I product is calculated based on the most recent household purchase of that product. Control variables include size and income of household, age and education of decision-maker. Results and Implications Our preliminary results confirm both our hypotheses. Consumer innovativeness has a strong influence on both additional purchases and substitute purchases. Also consistent with our hypotheses, the age of the generation I product has a dramatic influence for substitute purchases of VCR/DVD players and a strong influence for PCs/notebooks. Yet, also as hypothesized, there was no influence on additional purchases. This implies that there is a clear distinction between additional and substitute purchases of generation II products, each with different drivers. For substitute purchases, product age is a key driver. Therefore marketers of high technology products can utilize data on generation I product age (e.g. from warranty or loyalty programs) to target customers who are more likely to make a purchase.

Dynamics of railway wagons subjected to braking/traction torque

Braking or traction torque is regarded as an important source of wheelset skid and a potential source of derailment risk that adversely affects the safety levels of train operations; therefore, this research examines the effect of braking/traction torque to the longitudinal and lateral dynamics of wagons. This paper reports how train operations safety could be adversely affected due to various braking strategies. Sensitivity of wagon dynamics to braking severity is illustrated through numerical examples. The influence of wheel/rail interface friction coefficient and the effects of two types of track geometry defects on wheel unloading ratio and wagon pitch are also discussed in the paper.

Project culture in the Chinese construction industry : perceptions of contractors

In recent years culture has become one of the most studied topics in project management research. Some studies have investigated the influence of culture at different levels – such as national culture, industry culture, organisational culture and professional culture. As a project-based industry, the construction industry needs to have more insight concerning cultural issues at the project level and their influence on the performance of construction projects. Few studies, however, have focused on culture at the project level. This paper uses a questionnaire survey to determine the perceptions of Chinese contractors about the impact of project culture on the performance of local construction projects. This is augmented by a series of in-depth interviews with senior executive managers in the industry. The findings indicate that specific project culture does contribute significantly towards project outcomes. In particular, goal orientation and flexibility, as two dimensions of project culture, have a negative statistical correlation with perceived satisfaction of the process, commercial success, future business opportunities, lessons learnt from the project, satisfaction with the relationships, and overall performance. This paper also indicates that the affordability of developing an appropriate project culture is a major concern for industry practitioners.