Parallel time scales and two-dimensional manufacturer and individual customer warranties

Parallel time scales and two-dimensional manufacturer and individual customer warranties

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Article ID: iaor2002584
Country: United States
Volume: 30
Issue: 12
Start Page Number: 1181
End Page Number: 1189
Publication Date: Dec 1998
Journal: IIE Transactions
Authors: ,
Keywords: warranty
Abstract:

We deal with a system whose failures depend on several parallel effects, such as the time in use L and the mileage H. Manufacturer warranties are typically described by a two-dimensional region in the (L,H)-plane. A proper determination of the warranty limits must be based on a two-dimensional distibution of time to failure on this plane. The aim of this paper is to demonstrate the possibility of designing individual warranties for a ‘nontypical’ customer who has a very low or very high usage rate b = H/L, and to show a simple way to calculate warranty limits by minimizing the lifetime coefficient of variation. The latter is carried out by introducing the ‘best’ combined time scale in the form K = (1 – ε)L + εH which provides the minimal lifetime coefficient of variation.

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