A Bayesian Approach for the Determination of Warranty Length

Summary: [This abstract is based on the authors' abstract.]Reliability studies are often used to determine warranty length, but the literature frequently recommends the use of low quantiles of the estimated distribution of time to failure. A method based on the formulation of the utility function is proposed that considers product reliability, customer appreciation, company reputation, and the cost of fulfilling the warranty. Complete sampling or censorship is considered. The methodology is illustrated with the determination of warranty length for brake linings.