PROFIT ESTIMATION FOR A PRODUCT UNDER WARRANTY: AN EVALUATION BASED ON CUSTOMER'S EXPECTATION AND SATISFACTION.

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Bibliographic Details
Title:	PROFIT ESTIMATION FOR A PRODUCT UNDER WARRANTY: AN EVALUATION BASED ON CUSTOMER'S EXPECTATION AND SATISFACTION.
Authors:	KAPUR, P. K.¹, ANAND, ADARSH², SACHDEVA, NITIN²
Source:	International Journal of Reliability, Quality & Safety Engineering. Dec2014, Vol. 21 Issue 6, p-1. 16p.
Subjects:	Profit, Customer satisfaction, Economic expectations, Warranty, Industrial costs, Overhead costs
Abstract:	Performance of a product not as expected by the customer brings warranty expenditure into the picture. In other words, the deviation of the product performance (PP) from the customer expectation (CE) is the reason for customer complaints and warranty expenses. When this conflicting scenario occurs in market, warranty comes into existence and fulfilling warranty claims of customers adds to product's overall cost. In this paper, based on the difference between PP and CE about the product we estimate profit for the firm. Furthermore, factors like fixed cost, production cost and inventory cost have also been considered in framing the optimization problem. In the proposed model, a two-dimensional innovation diffusion model (TD-IDM) which combines the adoption time of technological diffusion and price of the product has been used. Classical Cobb-Douglas function that takes into account the technological adoptions and other dimensions explicitly has been used to structure the production function. The proposed model has been validated on real life data set. [ABSTRACT FROM AUTHOR]
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Database:	Engineering Source

Description
Abstract:	Performance of a product not as expected by the customer brings warranty expenditure into the picture. In other words, the deviation of the product performance (PP) from the customer expectation (CE) is the reason for customer complaints and warranty expenses. When this conflicting scenario occurs in market, warranty comes into existence and fulfilling warranty claims of customers adds to product's overall cost. In this paper, based on the difference between PP and CE about the product we estimate profit for the firm. Furthermore, factors like fixed cost, production cost and inventory cost have also been considered in framing the optimization problem. In the proposed model, a two-dimensional innovation diffusion model (TD-IDM) which combines the adoption time of technological diffusion and price of the product has been used. Classical Cobb-Douglas function that takes into account the technological adoptions and other dimensions explicitly has been used to structure the production function. The proposed model has been validated on real life data set. [ABSTRACT FROM AUTHOR]
ISSN:	02185393
DOI:	10.1142/S0218539314500296