Hazard rate estimation from incomplete and unclean warranty data

Warranty data are a rich source of information for feedback on product reliability. However, two-dimensional automobile warranties that include both time and mileage limits, pose two interesting and challenging problems in reliability studies. First, warranty data are restricted only to the reported failures within warranty coverage and such incompleteness can lead to inaccurate estimates of field failure rate or hazard rate. Second, factors such as inexact time/mileage data and vague reported failures in a warranty claim make warranty data unclean that can suppress inherent failure pattern. In this paper we discuss two parameter estimation methods that address the incompleteness issue. We use a simulation-based experiment to study these estimation methods when departure from normality and varying amount of truncation exists. Using a life cycle model of the vehicle, we also highlight and explore issues that lead to warranty data not being very clean. We then propose a five-step methodology to arrive at meaningful component level empirical hazard plots from incomplete and unclean warranty data.