Estimation of Warranty Cost

품질하자보증비의 추정

After the buyer purchases the product, the seller's role does not end. If the product fails to function properly before the end of the warranty period, the seller is responsible for its repair or replacement under the seller's warranty policy. There are two common types of warranty policies: the free replacement warranty and the rebate warranty. Under the free replacement warranty policy, replacement or repairs during the warranty period are provided by the seller free of charge to the buyer. Under the rebate warranty policy, a failed item is replaced by a new one or is repaired at a cost to the age of the failed item. The rebate warranty is most often used for items such as a battery or an automobile tire which wear out and must be replaced at failure. This paper proposes a easy way of estimating the warranty cost under the free replacement warranty policy assuming an exponential product failure function on repairable products.