Warranty Policies for Non-Repairable Items Under Risk Aversion

Authors

Peter H. Ritchken

Document Type

Report

Publication Date

9-1-1984

Abstract

An approach is presented for analyzing warranty policies for items receiving renewable warranties when failure occurs during the warranty interval. The model presented corrects a model of Thomas and then extends the methodology by describing how sellers’ risk aversity influences the policy. It is shown that for exponential failures, linear rebate policies are more attractive to risk averse sellers than shorter term full rebate policies that result in the same expected cost.

Keywords

Operations research, Risk perception, Rebates, Consumer behavior

Publication Title

Technical Memorandums from the Department of Operations, School of Management, Case Western Reserve University

Issue

Technical memorandum no. 551

Rights

This work is in the public domain and may be freely downloaded for personal or academic use

Recommended Citation

Ritchken, Peter H., "Warranty Policies for Non-Repairable Items Under Risk Aversion" (1984). Research Reports from the Department of Operations. 639.
https://commons.case.edu/wsom-ops-reports/639