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.

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.

Impact report on the Magnuson-Moss Warranty Act : a comparison of 40 major consumer product warranties from before and after the act /

Mode of access: Internet.

Warranty Prediction Using Weibull Simulation

The main objective of this master’s thesis is to examine if Weibull analysis is suitable method for warranty forecasting in the Case Company. The Case Company has used Reliasoft’s Weibull++ software, which is basing on the Weibull method, but the Company has noticed that the analysis has not given right results. This study was conducted making Weibull simulations in different profit centers of the Case Company and then comparing actual cost and forecasted cost. Simula-tions were made using different time frames and two methods for determining future deliveries. The first sub objective is to examine, which parameters of simulations will give the best result to each profit center. The second sub objective of this study is to create a simple control model for following forecasted costs and actual realized costs. The third sub objective is to document all Qlikview-parameters of profit centers. This study is a constructive research, and solutions for company’s problems are figured out in this master’s thesis. In the theory parts were introduced quality issues, for example; what is quality, quality costing and cost of poor quality. Quality is one of the major aspects in the Case Company, so understand-ing the link between quality and warranty forecasting is important. Warranty management was also introduced and other different tools for warranty forecasting. The Weibull method and its mathematical properties and reliability engineering were introduced. The main results of this master’s thesis are that the Weibull analysis forecasted too high costs, when calculating provision. Although, some forecasted values of profit centers were lower than actual values, the method works better for planning purposes. One of the reasons is that quality improving or alternatively quality decreasing is not showing in the results of the analysis in the short run. The other reason for too high values is that the products of the Case Company are com-plex and analyses were made in the profit center-level. The Weibull method was developed for standard products, but products of the Case Company consists of many complex components. According to the theory, this method was developed for homogeneous-data. So the most im-portant notification is that the analysis should be made in the product level, not the profit center level, when the data is more homogeneous.

Can consumer complaints reduce product reliability? Should we worry?

We analyze a monopolist’s pricing and product reliability problem when consumers are entitled to product replacement but have heterogeneous cost of exercising this right, and we assess the implications of a decrease in consumers’ claiming cost on reliability, profit, and welfare. We find that reducing consumers’ claiming cost may reduce reliability and increase profit. Additionally, the model can explain why some firms encourage consumers to complain while others discourage consumers from complaining. We also show that welfare and profit are partially aligned, specially when consumers’ claiming cost are relatively low and the firm prefers to promote complaints; consequently, we find that encouraging complaints will eventually increase welfare

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.

Challenges and Opportunities in Transforming Laser System Industry to Deliver Integrated Product and Service Offers

Part 4: Transition Towards Product-Service Systems

The Behavior of Hydroxyl Units of Synthetic Goethite and its Dehydroxylated Product Hematite

The behavior of the hydroxyl units of synthetic goethite and its dehydroxylated product hematite was characterized using a combination of Fourier transform infrared (FTIR) spectroscopy and X-ray diffraction (XRD) during the thermal transformation over a temperature range of 180-270 degrees C. Hematite was detected at temperatures above 200 degrees C by XRD while goethite was not observed above 230 degrees C. Five intense OH vibrations at 3212-3194, 1687-1674, 1643-1640, 888-884 and 800-798 cm(-1), and a H2O vibration at 3450-3445 cm(-1) were observed for goethite. The intensity of hydroxyl stretching and bending vibrations decreased with the extent of dehydroxylation of goethite. Infrared absorption bands clearly show the phase transformation between goethite and hematite: in particular. the migration of excess hydroxyl units from goethite to hematite. Two bands at 536-533 and 454-452 cm(-1) are the low wavenumber vibrations of Fe-O in the hematite structure. Band component analysis data of FTIR spectra support the fact that the hydroxyl units mainly affect the a plane in goethite and the equivalent c plane in hematite.

Study on microwave dielectric properties of epoxy resin mixtures used for rapid product development

This paper presents a preliminary study on the dielectric properties and curing of three different types of epoxy resins mixed at various stichiometric mixture of hardener, flydust and aluminium powder under microwave energy. In this work, the curing process of thin layers of epoxy resins using microwave radiation was investigated as an alternative technique that can be implemented to develop a new rapid product development technique. In this study it was observed that the curing time and temperature were a function of the percentage of hardener and fillers presence in the epoxy resins. Initially dielectric properties of epoxy resins with hardener were measured which was directly correlated to the curing process in order to understand the properties of cured specimen. Tensile tests were conducted on the three different types of epoxy resins with hardener and fillers. Modifying dielectric properties of the mixtures a significant decrease in curing time was observed. In order to study the microstructural changes of cured specimen the morphology of the fracture surface was carried out by using scanning electron microscopy.