Optimal determination of warranty region for 2D policy: A customersʹ perspective

Warranty is treated by the manufacturer as a marketing strategy that creates better customer satisfaction, which finally helps to get hold of a bigger market share. The cost incurred towards this service is termed as warranty cost, which is a function of warranty policy and region, product quality and reliability, and the customersʹ usage pattern. Under the 2D warranty policy, there exists numerous iso-cost regions for any specified value of warranty cost. In this article, we propose a methodology to determine the optimal region when customersʹ utility is measured by the length of warranty coverage time. It is believed that the results will help the manufacturer to provide improved customer service.