When to stop testing under warranty using SRGM with change-point

When a vendor sells a product, there is usually an implied promise that a product will do something. Under the law, when you buy the product, you can reasonably expect that the product will perform as promised. When a product is purchased and used by a customer then it might be possible that a difference between the product performance and customer expectation crops in. As a result the insurance policy of warranty comes into the picture. A warranty is simply a formal promise by a vendor that the product is defect free, meaning that it will do what it promises to do, and that if it fails to do so, then vendor will go about rectifying defects. But servicing a warranty engages additional costs to the manufacturer and this has an effect on the profit levels. Warranty cost may be reduced by providing higher reliable product. The conflict existing in the context of software reliability, warranty period and selling price need to be considered jointly. In this paper, we formulated an optimization problem that determines the optimal testing time and price with change-point under with warranty. The factors like fixed cost of testing and debugging during testing phase and warranty period cost of testing up to the release time considered in the problem of maximization of the profit.