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Approximating Expected Warranty Costs

1988; Institute for Operations Research and the Management Sciences; Volume: 34; Issue: 12 Linguagem: Inglês

10.1287/mnsc.34.12.1441

1526-5501

Edward W. Frees, Seong‐Hyun Nam,

Probabilistic and Robust Engineering Design

In this paper, we survey a portion of the literature in the analysis of warranty costs. In order to compare the price of different warranty policies, we review a framework which leads to expressing the expected costs in terms of complex functions arising in renewal theory. These functions and several approximations are discussed. In particular, a straight line approximation performs well.