WARRANTY COST ANALYSIS OF PRORATA POLICY FOR CONTINUOUS SALES PROCESS CONSIDERING WARRANTY EXECUTION FACTORS

摘要

Estimation of warranty servicing costs during the product life cycle, in the event of product failure within the warranty period, is of importance to the manufacturer. The warranty costs are usually drawn from a warranty reserve fund created by the manufacturer. Previous research has usually dealt with the unit item or a fixed product lot size in the market and assumed full execution of warranty if a product fails within the warranty period. In this paper, on the basis of investigating the effect of warranty execution, we obtain the estimating warranty costs model for continuous sales process of nonrepairable products under pro-rate warranty policy. The model discounts future warranty costs to their present value by adjusting for expected changes in the general price level and investment growth. From this model, we can obtain the cash flows of warranty reserve costs at any time intervals during the product life cycle. A numerical example is given to illustrate the proposed model.