Title: Price-warranty length decision with Glickman-Berger model

Authors: Dipak K. Manna

Addresses: SQC & OR Unit, Indian Statistical Institute, 110 Nelson Manickam Road, Chennai 600 029, India

Abstract: Product price and warranty length are the key determinants in the purchase decision of a consumer. This article deals with joint determination of these two attributes so as to maximise the profit of the manufacturer. The decision model of Glickman and Berger is shown to have an important role to play in this context, and is analysed with power law failure process in the case of one-dimensional warranty. A methodology is also proposed to extend this model for two-dimensional warranty.

Keywords: product price; profit maximisation; two-dimensional warranty; 2D warranty; warranty cost; warranty length; power law failure; automotive warranty data; automobile industry.

DOI: 10.1504/IJRS.2008.021066

International Journal of Reliability and Safety, 2008 Vol.2 No.3, pp.221 - 233

Published online: 01 Nov 2008 *

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