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Warranty policies and burn‐in
Author(s) -
Mi Jie
Publication year - 1997
Publication title -
naval research logistics (nrl)
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.665
H-Index - 68
eISSN - 1520-6750
pISSN - 0894-069X
DOI - 10.1002/(sici)1520-6750(199703)44:2<199::aid-nav4>3.0.co;2-4
Subject(s) - warranty , burn in , profitability index , failure rate , function (biology) , quality (philosophy) , product (mathematics) , computer science , point (geometry) , reliability engineering , operations research , operations management , business , economics , mathematics , engineering , finance , philosophy , geometry , evolutionary biology , political science , law , biology , epistemology
Warranty is an important factor for consumer durable products in the marketplace. However, the warranty cost may drastically reduce profitability. Burn in is a common procedure to improve the quality of products after they have been produced, but it is also costly. By taking both the burn‐in procedure and warranty policy into consideration, several cost functions can be formulated and optimized. Assuming that the failure‐rate function of the product has a bathtub shape, it is shown that the optimal burn‐in times that minimize the considered cost functions never exceed the first change point of the failure‐rate function. The continuous dependence of the optimal burn‐in times on the model parameters and the underlying distribution is also established. © 1997 John Wiley & Sons, Inc. Naval Research Logistics 44: 199–209, 1997