Research Reports from the Department of Operations
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