SOME RENEWAL THEORY RESULTS WITH APPLICATION TO FLEET WARRANTIES

The fleet warranty guarantees the purchaser of a large population of l ike items that the mean life of the fleet will meet or exceed some neg otiated mean mu(L). If the mean life is less than mu(L), compensation may be given in terms of a number of free replacement parts R. The exp ected number of replacements E[R] is studied based upon how the mean l ife of items in the field is determined and on whether the sampling wi ndow starts at time t = 0 (ordinary renewal process) or at some arbitr arily large time w (equilibrium renewal process). Properties of E[R] a re compared and examples are given. (C) 1994 John Wiley & Sons, Inc.