2-DIMENSIONAL FAILURE-FREE WARRANTY POLICIES - 2-DIMENSIONAL POINT PROCESS MODELS

A two-dimensional warranty policy is characterized by a region in a tw o-dimensional plane with the horizontal axis representing time and the vertical axis the usage. In this paper, we study two-dimensional fail ure-free warranty policies for nonrepairable items that require the ma nufacturer to replace all items which fail under warranty by new ones at no cost to the buyer. We derive expressions for the expected warran ty cost per item sold and for the expected life cycle cost for four di fferent warranty regions. We illustrate these by numerical examples an d discuss some resulting implications for the consumer and the manufac turer.