Determination of Bayesian optimal warranty length under Type-II unified hybrid censoring scheme

Article Type

Research Article

Publication Title

Quality Technology and Quantitative Management

Abstract

We consider determination of optimal warranty length for the combined free replacement and pro-rata warranty (FRW-PRW) policy based on the Type-II unified hybrid censored data by Bayesian approach. A non-linear pro-rata rebate cost function is proposed based on which warranty cost is computed. It is assumed that the lifetime follows log normal distribution. The optimal warranty length is obtained by maximizing an expected utility function consisting of three cost functions such as economic benefit function, warranty cost function and dissatisfaction cost function. The expectation is taken with respect to the posterior predictive model for the time-to-failure data. It is observed that the non-linear pro-rata rebate cost function gives a larger warranty length with maximum profit as compared to linear pro-rata rebate cost function. A real-data set is analyzed in order to illustrate the proposed methodology of finding optimal warranty length.

First Page

35

Last Page

49

DOI

10.1080/16843703.2021.1981530

Publication Date

1-1-2022

Comments

Open Access, Green

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