Invited Review: Mathematical models for analysis of warranty policies

Models for determining costs, to buyer and seller, of various types of warranties are summarized. Warranty costs depend on the life distribution of the items sold under warranty as well as on the warranty terms. Basic consumer warranties as well as warranties used in government and commercial transactions are considered. Free-replacement, pro-rata, reliability-improvement (RIW), cumulative and various combination warranties are analyzed. An overview of a wide variety of warranty conditions and analytical approaches and assumptions is presented.

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