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Research in marketing has extensively examined the signaling effects of product warranties on consumer perceptions. Although this stream of research has focused on initial product warranties offered by the manufacturer, studies of extended warranties, which protect consumers against product breakdowns beyond the warranty constraints of the manufacturer, are relatively scarce. This paper aims to empirically establish the effects of variables which influence the pricing of extended warranties for consumer durables.

Using data on over 8,000 product offers in six durable goods categories, drivers of the annual premiums for extended warranties are empirically identified. Bivariate and multi-level hierarchical linear regression methods are used to establish the effects of factors which may drive the prices of extended warranties.

The results reveal that the standardized annual premiums for extended warranties systematically vary across product categories and brands and are further affected by the retailer’s decision to use odd price endings for the sold product and the extended warranty. The influences of warranty length and price level of the protected product on extended warranty premiums are also empirically established.

The findings indicate systematic variations in extended warranty prices as a result of the factors studied. Future research can extend this line of inquiry by utilizing alternative means of data gathering.

Given that marketers often cross-sell many consumer durable goods with extended warranty policies, and considering the growth in consumer spending in this category, as well as the high retail margins associated with extended warranties, this paper contributes to the understanding of the mechanism by which extended warranty prices are determined in the marketplace.

This is the first study to examine the determinants of extended warranty prices, as past studies have been normative and non-empirical in nature.

Construction defects in residential buildings are causing significant impacts both on consumers and the industry. As a consequence, several countries have established new home warranty schemes. However, designing a public policy for domestic building warranties can become a difficult task. In fact, many of these programs in the past have failed, collapsed or gone bankrupt. Therefore, the purpose of the current research is to provide a systematic comparative representation of various active programs internationally.

The methodology relied on a multiple-case study research design. The case selection covered a total of nine jurisdictions with compulsory home warranty programs. Those included Japan, France, United Kingdom, three provinces in Canada (Ontario, British Columbia and Alberta), and three states in Australia (New South Wales, Victoria and Queensland). The study applied a data collection protocol to gather all the evidence in a replicable manner for each individual case. Subsequently, a cross-case analysis was conducted to identify similarities and variations between programs.

The findings unveiled institutional practices that aimed to resolve, compensate, or rectify defects in residential constructions within these countries. The review mostly suggested that every home warranty program presents certain unique characteristics. At the end, this paper proposed an analytical illustration representing the diversification of components adopted by each jurisdiction.

Nowadays, there is still not a consensus within the academic community on what is an optimal solution when conceiving a new home warranty program. Hence, the current study aims to fill this knowledge gap by presenting the plurality of methods employed by several countries. This paper seeks to help policy makers and industry leaders to improve their home warranty scheme based on awareness derived from observations and analyses of what has been accomplished elsewhere in the world.

The purpose of this paper is to propose a model that captures the fuzzy events is proposed to find the optimal periods of warranty policies. The model considers repair and replacement actions in the warranty period.

The study transforms the reliability of a traditional set to a fuzzy reliability set that models a problem. The optimality of the model is explored with classical optimal theory. Also, a numerical example is presented to describe how to find an optimal warranty policy.

The study proves that the optimality of a warranty model can be used to find the optimal warranty policy in a fuzzy environment.

The model is useful for firms in deciding what the maintenance strategy and warranty period should be in a fuzzy environment.

The purpose of this paper is to develop a model that determines whether how much effort of preventive maintenance action is worthwhile for the consumer over the post-sale product life cycle of a repairable complex product where the product is under warranty and subject to stochastic multimode failure process, that is, damaging failure and light failure with different probabilities.

The expected life cycle cost is designed for a warranted product from the consumer perspective. The product failure is quantified with failure rate function, which is the number of failures incurred over the product life cycle. The authors consider the failure rate function reduction method in their model where the scale parameter of a failure rate function is maximized by applying the optimal preventive maintenance level. The scale parameter of any failure distribution refers to the meantime to failure (MTTF). The first-order condition is applied with respect to the maintenance level in order to achieve the convexity of the nonlinear function of the expected life cycle cost function.

The authors have found analytically the close form of the preventive maintenance level, which can be used to find the optimal reduced form of the failure rate function of the product and the minimum product expected life cycle cost under the given condition of multimode stochastic failure process. The authors have suggested different maintenance policies to consumers in order to implement the proposed preventive maintenance model under different conditions. A numerical example further illustrated the analytical model by considering the Weibull distribution.

The consumer may use this study in the accurate modeling of the life cycle cost of a product that is under warranty and fails with a multimode failure process. Also, the suggested preventive maintenance approach of this study helps the consumer in making appropriate maintenance decisions such as to minimize the expected life cycle cost of a product.

This study proposes an accurate estimation of a life cycle cost for a product that is under the support of warranty and fails with multimode. Furthermore, for such a kind of product, which is under warranty and fails with multimode, this study suggests a new preventive maintenance approach that assures the minimum expected life cycle cost.

Considers the estimation problem of the total warranty cost under two types of warranty. The product (e.g. car) is sold under two types of warranty (mileage and age). The failed product will be minimally repaired by the manufacturer during the preassigned warranty, the length of which is determined by mileage or age, whichever occurs first. Under general distributions, obtains the formula of the expected value and variance of total warranty cost. Analyses special cases of the failure and running behaviours. Includes a numerical example.

To investigate the optimal burn‐in time from the perspective of minimizing the expected total cost (i.e. manufacturing plus warranty costs) per unit of product sold under a failure‐free renewing warranty policy. The conditions indicating when burn‐in becomes beneficial were also derived.

An age‐dependent general repairable product sold under a failure‐free renewing warranty agreement was considered. In the case of such a general repairable model, there are two ways in which the product can fail: type I failure (minor) can be rectified through minimal repairs; while in type II failure (catastrophic), the product must be replaced. Then optimal burn‐in time is then examined in order to achieve a trade‐off between reducing the warranty cost and increasing the manufacturing cost.

The optimal burn‐in time depends on the failure/repair characteristics, length of warranty, cost parameters and the probability of failure type II (catastrophic). A burn‐in program is beneficial if the initial failure rate is high or product failures during the warranty period are costly. Moreover, the optimal burn‐in time is always less than the infant mortality period.

The product considered in this paper is an age‐dependent general repairable product: on which no such study has yet been conducted. This is also the first study to apply a failure‐free renewing warranty to a general repairable item. It can be seen that the present model is a generalization of the model considered by Chien and Sheu.

The purpose of this paper is to propose a warranty-based bilateral automated multi-issue negotiation approach.

A methodology for bilateral automated negotiation process is developed considering the targets such as warranty attractiveness, warranty cost, mean time between failures, spare parts cost to the end user over the useful life of the life. The negotiation methodology is explained using different cases of negotiation. The optimization for each negotiation step is carried out using genetic algorithm with elitism strategy.

The result after optimization indicates that the desired target values are achieved and manufacturer obtained desired profit margin.

Application of automated negotiation model is illustrated using a real life case of an automobile engine manufacturer. The proposed approach helps the manufacturer of any product to develop a methodology for carrying out the negotiation process. The approach also results into taking warranty-related decisions at the design stage.

This paper contributes in proposing a generalized methodology for warranty-based negotiation in which the negotiation is carried out between the manufacturer and the customer.

To provide a brief survey of the literature directed towards the analysis of warranty claim data.

For convenience, this survey of the analysis of warranty claims data is somewhat arbitrarily be classified by topics as follows: age‐based claims analysis, aggregated warranty claims analysis, marginal counts of claims analysis, warranty claims analysis by using covariates, estimation of lifetime distribution using supplementary data, two‐dimensional warranty, warranty costs analysis, sales lag and reporting lag analysis, and forecasts of warranty claims.

Emphasis is placed on a discussion of different kinds of warranty claims data selected from reviews and on a comparison of the statistical models and methods used to analyze such data.

Since the literature on product warranty data is vast, more work on this problem is needed.

This review points out why warranty claims data is important and gives a survey of the literature pertaining to the analysis of such data. The emphasis is on the analysis of minimal databases of real warranty data, constructed by combining information from different sources, which can be collected economically and efficiently through service networks. The research is applicable for those responsible for product reliability, product design decisions and warranty management in manufacturing industries.

The paper reviews different statistical models and methods used to analyze warranty claims data. The statistical models and methods presented are be valuable and meaningful tools for product reliability and warranty management and analysis.

The purpose of this paper is to study the effectiveness of multiple signals. Specifically, the paper investigates how the individual strength of a marketplace signal varies as a function of whether consumers are exposed to that signal alone or in combination with another signal.

The research uses experimental designs to empirically address the research questions. Hypotheses are formulated primarily based on signaling theory and these hypotheses are tested with laboratory experiments using real consumers.

The key finding is that a signal's stand‐alone credibility largely determines whether its individual strength would be diluted or augmented by the coexistence of another signal. Further, when signals with different stand‐alone strengths coexist, the individual strength of the weaker signal is higher than when that signal is present alone. These effects are observed in brick‐and‐mortar and online shopping media.

Past research reports mixed findings about whether the individual strength of a signal is diluted (dilution effect) or augmented (augmentation effect) by the presence of another signal. This research attempts to resolve this issue, for the first time, by demonstrating that whether dilution effect or augmentation effect occurs depends on the stand‐alone credibility of the individual signals in a mix.

To provide a brief introduction to warranty analysis and a classification of general repairs. To introduce the notion of accelerated probability distribution and use it to model imperfect warranty repairs.

The notion of accelerated probability distribution is discussed and its similarity with quasi‐renewal and geometric processes is observed. An approach to modeling imperfect warranty repairs based on the accelerated probability distributions is presented, and the corresponding expected warranty cost over the warranty period under non‐renewing free replacement warranty policy is evaluated.

It is observed that quasi‐renewal and the geometric processes are equivalent. Using data from an existing warranty database it is shown that the inter‐repair times form a quasi‐renewal process. The corresponding expected warranty cost over the warranty period under a non‐renewing free replacement warranty policy is evaluated.

This approach is applicable only if the cost of the warranty repair is an increasing function of the number of repairs.

Provides a useful approach to modeling inter‐repair times incorporating the idea of imperfect repairs in practice.

Provides an approach to model imperfect warranty repairs and to evaluate the corresponding expected warranty cost.