Optimal burn-in for repairable products sold with a two-dimensional warranty

Abstract

Warranty data analyses reveal that products sold with two-dimensional warranties may have significant infant mortalities. To deal with this problem, this article proposes and studies a new burn-in modeling approach for repairable products sold with a two-dimensional warranty. More specifically, two types of failures are characterized—i.e., normal and defect failures—and performance and cost-based burn-in models are developed under the non-renewing free-repair warranty policy. The proposed models subsume the special cases of a one-dimensional warranty, allow different failure modes to have distinct accelerated relationships, and take consumer usage heterogeneity into consideration. Under mild assumptions, it is established that the optimal burn-in usage rate should be as high as possible, provided that no extraneous failure modes are introduced. Furthermore, It is shown that the optimal burn-in duration determined from the performance-based model is not shorter than that from the cost-based model. Numerical examples are used to demonstrate the benefits of burn-in. In addition, some practical implications from a sensitivity analysis are elaborated.

Keywords:

• Burn-in
• cost analysis
• two-dimensional warranty

6. Acknowledgement

The authors thank the editor and two reviewers for their critical and constructive comments, which have helped in the revision of an earlier version of the article.