PROJECT TITLE :

Aggregate Discounted Warranty Cost Forecast for a New Product Considering Stochastic Sales

ABSTRACT:

Most industrial product are sold with a guaranty. Product repairs during the warranty period are often freed from charge, and contribute significantly to the prices of a manufacturer. Estimation of the warranty prices is very important for the manufacturer to arrange sufficient warranty reserves for future claims. As a result of merchandise are typically sold to customers intermittently, the overall range of sold units underneath warranty varies over time, which presents difficulties in forecasting the warranty prices over time. In this study, we tend to consider the stochastic sales method, and derive the expectation and variance of the aggregate discounted warranty prices within a given period of your time. By taking the variation of the warranty prices into thought, the result will be employed in the preparation of a conservative warranty reserve for a new product. The discounted life-cycle warranty value may be a special case of our model, and it will additionally be determined from our result. Numerical results show the applicability of our model in estimating periodic discounted warranty costs, and getting ready each short-term and long-term warranty reserves.