Researches On Warranty Cost,Warranty Pricing And Warranty Strategy Optimization

Fierce competition and increasing customer requirements force manufacturers to continuously provide high quality warranty services.Accurate estimation of warranty service cost and optimization of warranty strategy are crucial to product pricing and quality control.The extended warranty service market has become increasingly prosperous,and it has become the main growth point of profits for manufacturers,retailers,third-party insurance companies and so on.The design,pricing and optimization of extended warranty are the focuses of warranty decision.Based on the practice of warranty engineering,this thesis constructs warranty models and analyzes their costs,discusses the design and pricing of warranty menu for accidental damage,builds the extended warranty pricing models and optimizes them.The main contents are as follows.（1）Based on lemon laws,multi-state product warranty models are built and their warranty costs are also derived.Based on lemon laws,two warranty cost models are established,namely{τ,N}model and{τ,N₁,1}model.Homogeneous Markov chains with multiple working and failure states are used to model the failure processes of products.Under{τ,N}model,τis the threshold of repair time and N is the threshold of numbers for failures.The product will be replaced by a new and identical one,and warranty terms are renewed at no charge to customers if the repair time for a failure（regardless of the failure type）is more thanτor the number of failures is more than N within the warranty period.Under the{τ,N₁,1}model,the product will be replaced by a new and identical one,and the warranty is renewed at no charge to the customer if the repair time for a failure（regardless of the failure type）is more thanτ,the number of common failures is more than₁N or the number of catastrophic failures is more than 1 within the warranty period.Probability analysis and Laplace transform are used to obtain warranty costs.The effectiveness of these models is verified by numerical examples.（2）The design and pricing problem of extended warranty considering accidental damage is discussed.Firstly,the design and pricing of single stage extended warranty underwriting accidental damage and degradation failures are discussed.The extended warranty menu has multiple options with the same extended warranty time but different prices,and different numbers of accidental damage repairs at a low price.Within the warranty period,the manufacturer repairs degradation failures at no charge to customers.Then,the single-stage model is extended to two-stage ones,one is unified pricing and the other is differential pricing.Under the two-stage pricing models,according to the use experience in the first stage,customers can choose to buy the same warranty menu again at the same（unified pricing）or different（differential pricing）prices in the second stage.Finally,a customized extend warranty menu driven by accidental damage arrival rate is designed and priced.Multinomial logit model is adopted to describe customer choice behaviors in the aforementioned models.Numerical examples are given to illustrate the effectiveness of these models.The profits of single-stage and two-stage designs are compared and the applicability scenes of them are given.（3）The extended warranty model with two warrantors（the manufacturer and the retailer）is built and optimization analysis is also carried out.It is assumed that,during the extended warranty period,the manufacturer performs minimal repairs for product failures,while the retailer provides imperfect preventive maintenances periodically and performs minimal repairs for failures between the two successive preventive maintenance actions.The virtual age is used to describe the impact of imperfect preventive maintenance actions on product performance.The optimal extended warranty prices of the manufacturer and the retailer and the number of imperfect preventive maintenance actions that maximize the profits of the retailer are derived by Stackelberg game theory.Numerical examples are given to illustrate the effectiveness of the model.The effects of the competition intensity and the retailer’s warranty policy on the profits of two warrantors,the total profit of the supply chain are discussed.