Warranty Cost Models using Accelerated Life Tests on Dagum Distribution

Abstract

Warranty one of the main factors which effect on the decision to purchase any product whether it is non repairable or repairable, therefore, in market the manufacturers can compete by using warranty service. The cost of warranty are wanted to predict which are mirrored on the price and profitability of products. To achieve this goal, the research is concerned with predicting the cost of the two common types of warranty models which are free rebate warranty and pro-rata rebate warranty when The lifetime of items is assumed to follow Dagum distribution. The constant stress partially accelerated life tests based on type II censoring is used. Maximum likelihood method is used to estimate the model parameters and acceleration factor of lifetime distribution from the test data. Confidence Interval for the model parameters are constructed using normal approximation and bootstrap method. Finally, Some numerical illustrations are provided.