Evaluation of the warranty cost of a product with type III stochastic dependence between components
Applied Mathematical Modelling
This paper analyses respectively the expected warranty costs from the perspectives of the manufacturer and the consumer. For a two-component series system with stochastic dependence between components, both the non-renewing free replacement policy and the renewing replacement policy are examined. It is assumed that whenever component 1 fails, a random damage to component 2 is occurred while a component 2 failure causes the system failure. Component 2 fails when its total accumulative damage exceeds a pre-determined level L. By considering the consumer’s behavior and the product service time, the warranty costs allocations between the manufacturer and the consumer are presented. Numerical examples are given to demonstrate the applicability of the methodology.