Warranty cost analysis: Increasing warranty repair times

Sarah Marshall*, Richard Arnold, Stefanka Chukova, Yu Hayakawa

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

18 Citations (Scopus)


In this study, we model the warranty servicing costs under nonrenewing and renewing free repair warranties. We assume nonzero increasing repair times with the warranty cost depending on the length of the repair time. An increasing geometric process is used to model the consecutive repair times. We introduce the generalised alternating renewal process, which is an alternating process with cycles consisting of an item's operational time followed by the corresponding repair time. We derive analytical results for a generalised alternating renewal process with a finite time horizon and use them to evaluate the warranty costs over the warranty period and over the life cycle of the product under the nonrenewing free repair warranty and renewing free repair warranty. Properties of the model are demonstrated through a simulation study and through the application to warranty claims data from an automotive manufacturer.

Original languageEnglish
Pages (from-to)544-561
Number of pages18
JournalApplied Stochastic Models in Business and Industry
Issue number4
Publication statusPublished - 2018 Jul 1


  • generalised alternating renewal process
  • geometric process
  • warranty

ASJC Scopus subject areas

  • Modelling and Simulation
  • General Business,Management and Accounting
  • Management Science and Operations Research


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