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.

Product warranty and reliability

Product warranty is an important part of new product marketing and sales. Offering warranty implies additional costs in the form of warranty servicing cost. Product reliability has a serious impact on the warranty servicing cost. As such, effective management of product reliability must take into account the link between warranty and reliability. This paper deals with this topic and develops a framework needed for effective management of product reliability. It reviews the relevant literature and defines topics for future research.

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.

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.

Warranty cost analysis for second-hand products

For second-hand products sold with warranty, the expected warranty cost for an item to the manufacturer, depends on (i) the age and/or usage as well as the maintenance history for the item and (ii) the terms of the warranty policy. The paper develops probabilistic models to compute the expected warranty cost to the manufacturer when the items are sold with free replacement or pro rata warranties. (C) 2000 Elsevier Science Ltd. All rights reserved.