TY - JOUR
T1 - Warranty Cost Analysis for Multi-State Products Protected by Lemon Laws
AU - Wang, Liying
AU - Song, Yushuang
AU - Qiu, Qingan
AU - Yang, Li
N1 - Publisher Copyright:
© 2023 by the authors.
PY - 2023/2
Y1 - 2023/2
N2 - The implementation of lemon laws in America has played an important role in improving the quality of after-sales service. Nowadays, many countries, such as China, Canada, Europe, Australia, Singapore, and South Korea, have adopted lemon laws in various industries to protect the interest of consumers. From the perspective of manufacturers, accurate estimation of the cost of the warranty service is of great importance in guiding product pricing, quality control, and design of warranty policies. According to the terms of different lemon laws, two warranty models considering the repair time and numbers for failures are proposed in this paper. Products under these models are multi-state, and Markov processes are used to model the degradation processes of products. In the first model, a product will be replaced by a new one if the time for a repair or the number of failures exceeds their respective thresholds over the warranty period. Under the second model, both catastrophic and minor failures are considered. A product will be replaced if one of the following three conditions is met over the warranty period: the time of one repair action (regardless of failure type) is longer than a time threshold; the number of minor failures is larger than a preset threshold; a catastrophic failure occurs. The expected warranty cost rates under the two proposed warranty models are derived under the assumption of renewable warranty terms. Numerical examples are given to illustrate the results obtained.
AB - The implementation of lemon laws in America has played an important role in improving the quality of after-sales service. Nowadays, many countries, such as China, Canada, Europe, Australia, Singapore, and South Korea, have adopted lemon laws in various industries to protect the interest of consumers. From the perspective of manufacturers, accurate estimation of the cost of the warranty service is of great importance in guiding product pricing, quality control, and design of warranty policies. According to the terms of different lemon laws, two warranty models considering the repair time and numbers for failures are proposed in this paper. Products under these models are multi-state, and Markov processes are used to model the degradation processes of products. In the first model, a product will be replaced by a new one if the time for a repair or the number of failures exceeds their respective thresholds over the warranty period. Under the second model, both catastrophic and minor failures are considered. A product will be replaced if one of the following three conditions is met over the warranty period: the time of one repair action (regardless of failure type) is longer than a time threshold; the number of minor failures is larger than a preset threshold; a catastrophic failure occurs. The expected warranty cost rates under the two proposed warranty models are derived under the assumption of renewable warranty terms. Numerical examples are given to illustrate the results obtained.
KW - Markov process
KW - lemon laws
KW - multi-state products
KW - renewable warranty
KW - warranty
UR - http://www.scopus.com/inward/record.url?scp=85148033185&partnerID=8YFLogxK
U2 - 10.3390/app13031541
DO - 10.3390/app13031541
M3 - Article
AN - SCOPUS:85148033185
SN - 2076-3417
VL - 13
JO - Applied Sciences (Switzerland)
JF - Applied Sciences (Switzerland)
IS - 3
M1 - 1541
ER -