A warranty policy with replacement and repair periods

This paper compares the two warranty policies which are used in Korean electronic appliance industry. Policy I is a general warranty policy under which all failures during warranty period (12 months) are repaired without charge. Policy II was proposed recently by a company. Under policy II, when the product fails under a certain time (6 months), the failed product will be replaced by a new product and all other failures from the certain time to the warranty period (24 months) will be repaired free. The authors obtain the expected total warranty costs per product and necessary conditions under which the Policy II has a meaning in economic point of view without or with discount rate. Some numerical examples are considered. [In Korean.]