Article ID: | iaor20013862 |
Country: | Netherlands |
Volume: | 38 |
Issue: | 4 |
Start Page Number: | 425 |
End Page Number: | 434 |
Publication Date: | Dec 2000 |
Journal: | Computers & Industrial Engineering |
Authors: | Rao B.M., Kim H0-Gyun |
Keywords: | warranty |
Many warranty policies offered by manufacturers are limited by two factors, typically time since purchase, and usage of the product. Such policies are referred to as two-attribute (or two-dimensional) warranty policies and can be described in terms of regions in a plane with one axis representing time and the other axis the usage. In this paper, we consider two-attribute warranty policies for non-repairable items. The item failures are described in terms of a bivariate exponential distribution. Analytical expressions are derived for the resulting two-dimensional renewal function and the cost of warranty. An illustratve numerical example is presented to study the effect of correlation between the warranty variables on the cost of warranty.