Warranty servicing strategies to improve customer satisfaction

Customer satisfaction with a purchased product depends on its performance under warranty and during the remainder of its useful life. Dissatisfaction with an item is important to a manufacturer since it can lead to the loss of potential customers through the negative word-of-mouth effect as well as existing customers switching to a competitor. In this paper, we define satisfaction in terms of the likelihood of a customer not switching to a different manufacturer when a new item needs to be purchased. Manufacturers can use specific servicing strategies to reduce warranty costs and this topic has already been addressed in the literature without considering the effect of customer dissatisfaction. In this paper, we propose particular strategies that will increase customer satisfaction and we discuss methods for obtaining the optimal parameters of these strategies.

A servicing strategy for items sold under warranty

When repairable items sold under warranty fail, the rectification action taken by the manufacturer can be either a repair or a replacement, In this paper a new repair-replacement strategy is proposed for the manufacturer when the items are sold with a non-renewing free replacement warranty policy. The strategy involves splitting the warranty period into two intervals where only repairs are carried out, separated by a third interval with at most one replacement.

Warranty and preventative maintenance

For products sold with warranty, preventive maintenance actions by manufacturers and/or buyers have an impact on the total costs for both parties. This paper develops a framework to study preventive maintenance actions when items are sold under warranty and reviews the models that have appeared in the literature. It then develops a new model and carries out its analysis.

New product warranty: A literature review

Warranty is an important element of marketing new products as better warranty signals higher product quality and provides greater assurance to customers. Servicing warranty involves additional costs to the manufacturer and this cost depends on product reliability and warranty terms. Product reliability is influenced by the decisions made during the design and manufacturing of the product. As such warranty is very important in the context of new products. Product warranty has received the attention of researchers from many different disciplines and the literature on warranties is vast. This paper carries out a review of the literature that has appeared in the last ten years. It highlights issues of interest to manufacturers in the context of managing new products from an overall business perspective. (C) 2002 Elsevier Science B.V. All rights reserved.

A new preventive maintenance strategy for items sold under warranty

When products are sold under warranty, the manufacturer incurs additional costs for warranty servicing. Preventive maintenance actions can be used to reduce this cost and these are worthwhile only if the extra cost incurred is less than the reduction achieved. In this paper we propose a new preventive maintenance policy where the parameters are selected optimally to minimize the total warranty servicing cost.

Comments on "Maintenance policies with two-dimensional warranty"

Chen and Popova [Res. Engng Syst. Saf. 77 (2002) 61] discuss maintenance policies for items sold with a two-dimensional warranty. However, their paper fails to give a proper review of the literature and it also contains errors. In this note we first review the relevant literature and then comment on the errors in their analysis. (C) 2003 Elsevier Ltd. All rights reserved.

Warranty and optimal reliability improvement through product development

For products sold with warranty, the warranty servicing cost can be reduced by improving product reliability through a development process. However, this increases the unit manufacturing cost. Optimal development must achieve a trade-off between these two costs. The outcome of the development process is uncertain and needs to be taken into account in the determination of the optimal development effort. The paper develops a model where this uncertainty is taken into account. (C) 2003 Elsevier Ltd. All rights reserved.

Repair-replace strategies for two-dimensional warranty policies

For repairable items sold with free replacement warranty, the actions available to the manufacturer to rectify failures under warranty are to (1) repair the failed item or (2) replace it with a new one. A proper repair-replace strategy can reduce the expected cost of servicing the warranty. In this paper, we study repair-replace strategies for items sold with a two-dimensional free replacement warranty. (C) 2003 Elsevier Ltd. All rights reserved.

Optimal reliability improvement for used items sold with warranty

The market for used products is becoming more competitive and dealers of used products use warranty to promote sales as well as to provide assurnace to customers. Offering warranty results in additional costs associated with warranty servicing. This cost can be reduced through actions such as overhaul and upgrade that improves the reliability of the item. This is worthwhile only if the cost of improvement is less than the reduction in the warranty servicing cost. This paper deals with two models to decide on the reliability improvement strategies for used items sold with FRW policy.

Product warranty logistics: Issues and challenges

Warranty is an important element of marketing new products. The servicing of warranty results in additional costs to the manufacturer. Warranty logistics deals with various issues relating to the servicing of warranty. Proper management of warranty logistics is needed not only to reduce the warranty servicing cost but also to ensure customer satisfaction as customer dissatisfaction has a negative impact on sales and revenue. Unfortunately, warranty logistics has received very little attention. The paper links the literature on warranty and on logistics and then discusses the different issues in warranty logistics. It highlights the challenges and identifies some research topics of potential interest to operational researchers. (C) 2003 Elsevier B.V. All rights reserved.

Warranty and discrete preventive maintenance

Preventive maintenance actions over the warranty period have an impact on the warranty servicing cost to the manufacturer and the cost to the buyer of fixing failures over the life of the product after the warranty expires. However, preventive maintenance costs money and is worthwhile only when these costs exceed the reduction in other costs. The paper deals with a model to determine when preventive maintenance actions (which rejuvenate the unit) carried out at discrete time instants over the warranty period are worthwhile. The cost of preventive maintenance is borne by the buyer. (C) 2003 Elsevier Ltd. All rights reserved.