Developing A Warranty Cost Model

Developing A Warranty Cost ModelChapter 2 literature re mint.2.1. presentment to imagineablenessThe reliableness expression may some ms be unclear in general logic due to the differences in downstairsstanding it among clients. apiece customer sack up limit dependableness from a diametrical point a view. As an sheath a customer may define it as cheap reaping which has a long guaranteed spiritedness cycle period and in the meanwhile works hardly enough. Whereas an new(prenominal) customer may define it as a reasonable price merchandise which has a liveness cycle period and go away definitely work as intended. (Institute et al., 1968)The concept dependability is very clear and understandable in the pragmatical and industrial world.reliableness of a product, process, or establishment is the probability that it bequeath run as specified, and under certain condition, for a specified period of time.(2Blank, 2004)Reliability is know as the likeliness of a product, for ge or a character, to keep doing its intended task with place breaking down under precise conditions for a given period of time. (Yang, 2007) (Yang, 2007)The above expression holds three signifi beart essentials to envision the full understanding of dependablenessTo know the planned aim or task of a product, machine and broker.To know the planned sequence specified relating to a product, machine and component.To know the environment surrounding where the product, machine, and component, suppose to be working at. learned these three essentials conditions forget allow us to estimate the product, machine or component reliability capableness from the first instance.2.1.2. Reliability Engineering StudiesThe purpose of reliability picture studies is to control, or to make sure that a product, machine or component will be reliable under normal ope balancen in a specified studied manner, as easy as away from breaking downs. (Smith, 1972)Reliability engineer studies be science utilize to minimize the outcome effects and possible behaviour which will depart in maximizing reliability.There be three necessary conditions to achieve the previous statementsTo build a uttermost reliability consideration into a product, machine and component, during the throw and using stages this consideration is know to be the most critical point due to its responsibility in inherent reliability.To cut down end product process differences this will guarantee that the process will not deliberately degrade the inherited reliability. at a time a product is manufactured. A well avered operation should be commenced this will delay the achievement degradation and will extend the product life.(Hartman, 2007)These considerations argon presented within a large selection of reliability techniques, as an instance reliability planning and specification, fault tree analyses, accelerated life testing, degradation testing, reliability verification testing and stock-purchase warrant analysis.(Yang, 2007)2.1.3. Reliability Main FactorsTo judge on the reliability of each product, at that place be factors should be known, as an instanceIntentional usage or application.Product, machine and component specification.Price. guest expectations.Level of inconvenience ca utilize by product, machine or component breakdown.2.1.4. Reliability MeasurementsIn a view of the fact that reliability is measured by probability or likelihood, any(prenominal) effort to measure it will engage the usage of statistical regularitys. Therefore statistics argon very important tools in relating to reliability studies. (Yang, 2007)2.1.5. Reliability FormulaWarranty and reliability share the kindred patterns for an scotch sense to be observed. Reliability has been determine as the likelihood of a product to keep performing its intended task without breaking down.R= reliability.P (s) success probability.N number of attempted trails.S number of success.F number of losers.Reliability ma inly presents the successes and blows in a process, where a good economic indorsement cost place has senior mellow school accuracy in reliability foresight.Design for Reliability Overview of the exercise and Applicable Techniques. 2011. Design for Reliability Overview of the Process and Applicable Techniques. ONLINE ready(prenominal) at http//www.reliasoft.com/newsletter/v8i2/reliability.htm. Accessed 19 March 2011.2.1.6. Reliability ImprovementThere are many shipway by which the reliability can be affected, below are two waysQuality is the integration of features and characteristics of a product or a serving, to enable us to meet the unavoidably and specific requirements.Repetition of the same task causing financial and labor waste. (6Condra, 2001)2.1.7. Reliability ApplicationsVarious phases of a power plant much(prenominal) as construction, production and forethought shall apply the reliability selective information analysis. such(prenominal) a info might be (Heyman , 1988)applicable for production planning, benchmarking , trend analysis, plant components alterment, fortune issues, RCM , spare split optimization, Design review , Structural reliability. (Heyman, 1988)Data on existing social units can be effectively utilitarian for benchmarking the unit performance, during RCM, ill opposeions, the spare parts optimization.(Heyman, 1988)2.1.8. Reliability Prediction ScienceIt is considered to estimate the effects of the choices make prior the ashes is built or put into service. Reliability prediction handles the analysing of products with the tending of models better than concrete systems to grant a solid fundament for testing, analysing, planning, manufacturing, and estimating reliability.An ideal example of reliability prediction is to predict the system of specified design and specified group of components in an ideal working environment. At the end of the prediction the reliability of the same system should be tested in a different surroundings from those which data and prediction were obtained from earlier.(3Blischke and Murthy, 2000)Reliability prediction procedure is attempted at the very first steps of ameliorate a program to hold up the design procedure. Commencing a reliability prediction armed services in furnish clear demands of reliability enhancement within the improvement stage, and the knowledge of the possibilities of sorrow of the equipment in its operation life.The reward of applying reliability prediction, machinery designs are able to develop, money is saved rather than spending on poor designs and time is preserved concerning testing.A widely used way for prediction the reliability of machinery is based on database usage, in time this way is not probable due to variety types of chastening rates which dramatically happen to analogous products.(Geitner and Bloch, 2006)2.1.9. Objective of Reliability PredictionThe importance of reliability prediction lies down under several pointsThe rel iability prediction should be implemented as an assurance program in different sections of a plant.Repairing decisions are taken when and where problems appear.(Kececioglu, 2002)2.1.10. Taxonomy Related to ReliabilityAvailability It can be defined as the probability that the component will start at any random time.Mean time to failure (MTTF) The time that elapses until a failure occurs.Mean time between failures (MTBF) It is the average time between failures. It is used for doctorable systems. bereavement set out The failure rate in a time separation which is the probability that a failure per unit time occurs in the interval given.Hazard Function The failure rate limit as the interval hailes zero.(Pham, 2006)2.2. Reliability Centred MaintenanceThe word maintenance from the engineering point of view is to take the necessary implement to maintain or restore equipment and machinery, or system to determine the practical requirement to achieve maximum validity. This includes corre ctive maintenance, preventive maintenance, and predictive maintenance.What is maintenance? Definition and Meaning. 2011. What is maintenance? Definition and Meaning. ONLINE acquirable at http//www.businessdictionary.com/ commentary/maintenance.html. Accessed 19 March 2011.Reliability centred maintenance or (RCM) can be expressed as an sophisticated study into maintenance, which joins the maintenance of interactive applications, preventive, predictive, and proactive, as well as the formation of plans to make the most of the life of the product, and also to ensure proper function for the product, machine and component at the lowest possible cost.Introduction to Reliability Centered Maintenance (RCM) Part 1. 2011. Introduction to Reliability Centered Maintenance (RCM) Part 1. ONLINE Available at http//www.plant-maintenance.com/RCM-intro.shtml. Accessed 19 March 2011.2.2.1. Preventive MaintenancePreventive maintenance is the programme of planned maintenance, which aims to prevent the c ollapse and failure. The main quarry of preventive maintenance is to prevent the failure of equipment forward it happen. It is designed to maintain and improve equipment reliability by replacing worn components before they fail in practice. Preventive maintenance activities include equipment checks and repairs, partial or effect checks at fixed intervals, oil changes, and lubrication and so on.In addition, workers can temperament equipment deterioration so they know when to replace or repair defective parts before they cause system failure. It would be an ideal preventive maintenance program to prevent all equipment failure before it happens.Preventive Maintenance. 2011. Preventive Maintenance. ONLINE Available at http//www.weibull.com/SystemRelWeb/preventive_maintenance.htm. Accessed 19 March 2011.2.2.2. Predictive MaintenanceTechniques help to determine the status of equipments in service in order to predict when you mustiness perform maintenance.This approach offers cost sav ings over routine preventive maintenance.What Is Predictive Maintenance?. 2011. What Is Predictive Maintenance?. ONLINE Available at http//www.wisegeek.com/what-is-predictive-maintenance.htm. Accessed 19 March 2011.2.2.3. Terms and Goals of Using Reliability Cantered MaintenanceThe majority of maintenance organizations bump the goals of using (RCM) by the below listed stepsScheduling the tasks by its priority.Consider the safety prospective.To be long-familiar with the machinery capabilities severally type of machinery will have different performance type.Knowing the failure causes to recognize when the decently moment to reduce it is.Using skilled staff to help out in scheduling priorities.Practicing clogging tasks to help in knowing the machinery status.Disposing and replacing the damaged components to ensure the effectiveness of the other related parts.Standards must be identified for each step mentioned above.It is important that the steps are done by the same staff who are responsible of the function and operation of the plant.(Tweeddale, 2003)The conditions to develop a sufficient (RCM) program depend on the success of using the observation and statistical methods, because sometimes both methods depend on each other.2.3. Failure Mode and Effects AnalysisMechanical failures are introduced as any significant changes regarding size, flesh or material characteristics in a system.The first and main responsibility of any mechanical graphic designer is to make sure that the design produced is capable of doing its function properly, meets the designated life time and most important is to be competitive in the market.Estimating and identifying all possible modes of failure which may restrict the functionality of the design will ensure the success in designing.The designer must be familiar with the variety collection of failure modes presented in the work sites as well as the circumstances leading to it, so the designer becomes ready to prevent failure from occurring once again.The designer should preferably have an on hand experience to investigate foreseeable failures in a professional manner, thus failures could be prevented in future. It is clear that the failure analysis, prediction, and preventative are significant to be known to every designer.(5Collins, 1993)The term behind the failure can be known as the failure to meet some specific performance measurements. Different between definitions terms such as defects, malfunction, fault and reject are usually vital in comparing causes of failures, as well as in the categorizing and analyzing of provided information.The different between the terminologies is mainly to define the types of failure, reasons, and level of failure. For any introduced definition of failures there are no doubts in introducing reliability. Because the failure is the absent of the specification and so changes in performance capabilities occur. (Smith, 2005)The adherence of the data could be done by two met hods, first by using history data this will enable us to have a look at similar machinery which may had go through identical problems, sanction data, and customer feedback.Second method is conducted, by using several mathematical methods, models and simulations. dealings with (FMEA) does not always mean that one way is better or more accurate than the other both of the methods can be used if applied correctly.The proper way in commencing (FMEA) will publication is providing helpful data which can help in reducing the hazards relating to work load in a system, product and service.The (FMEA) is one of the most businesslike ways considered in preventative maintenance. The (FMEA) will help in having knowledge about what is suitable field tasks should be done to keep failures away from happening.An effective and successful (FMEA) system could be recognized by meeting these objectives, first recognize the known and possible failures modes, and and then reasons of failures. Schedul e the failures modes according to the highest risk level, and finally follow up the work done to ensure the correction of the failure.(Stamatis, 2003)2.3.1. When and Where To Use Failure Mode and Effects AnalysisThe (FMEA) procedure is extensively used in different stages, regarding product designing and manufacturing processes. It offers a well organized structure and an easy way to communicate amongst the group of manufacturers. It can be used as well in developing services which will help production process.(McDermott et al., 1996)Traditional failure modes and effects analysis (FMEA) are mainly used models in stock-purchase warrant cost among other models in the automobile industry. (Majeske, 2003)An essential term to inherent reliability into a product or system is by recognizing the failure causes, and making sure they are removed or that their likelihood of happening once again is low.This thought can be done by conducting tests, or logically by using models. Failure mode an d effects analysis is a planned way in clarifying the origin of failures modes, and it is considered to be a sufficient reliability schedule, especially it links to reliability development throughout design stage.(7Denson, 2006)2.4.4. Hazard and Operability Study (HAZOP)Risk analysis is an orderly and systematic method for run system and risk management. In particular, are often used as a risk and in operation(p) Technique to identify potential hazards in the system and identify interoperability problems.It assumes that events are caused by the risk of design or operating intentions. This approach is a unique feature of risk and vulnerability to treatment methodology that helps to stimulate the imagination of the team Members when exploring potential deviations. conformation (2) shows a standard of HAZOP system.(Organisation and Safety, 1988)Figure (1) a sample of HAZOP systemHazard Operability Studies (Hazops) 1 of 2. 2011. Hazard Operability Studies (Hazops) 1 of 2. ONLIN E Available at http//www.lihoutech.com/hzp1frm.htm. Accessed 19 March 2011.2.3.2. Failure PreventionFailures are predictable, sooner or later all products, machines and component will experience failure due to many reasons.(Yang, 2007)In any engineering system failures are expected. The effects of failures differentiate from runty inconvenience be to financial drops. Failures happen due to various factors, such asBad engineering design.Manufacturing process errors.Insufficient testing.Human mistakes.Poor maintenance.Misuse.In order to reduce failures or breakdowns in any engineering systems, there are some methods should be followed range the cause and the way the failure happened.Identify how many times do the failure tends to repeat.Reliability handles the failure concepts in details via different statistical approaches. Whereas safety tries to study, specify, measure, determine, and analyze the failure.(Verma et al., 2010)2.4. Introduction to HazardThe accurate understanding of hazard is appreciated due to its criticality. It supplies us with the base foundation of a system safety.Hazard analysis is conducted to identify hazards consequences, and hazard main factors, As well as to determine the risks facing the system.To carry out hazard analysis in a proper manner, it is essential to recognize what causes hazards and how to define hazards. Understanding the hazard character is an important issue to improve the skills needful to identify potential hazards and their results in a system design.(Ericson, 2005)2.4.1. Hazard AnalysisThis analysis involves describing the complete process first, and then collecting the answers for a set of systematic questions. The purpose is to identify how exactly the deviations from the design can arise. These deviations are further assessed by any negative effect of their consequences on the safe and efficient operation of the plant. The legal opinion would provide a basis for any action to be taken to remediation this si tuation.From an engineering point of view, hazard analysis process is the best tool for analyzing reliability data. It can be used to make conclusions about the reliability of a component. (12002)2.4.2. Survival AnalysisSurvival function, also known as a reliability function of the survivors, is a property of any random variable that maps a set of events, usually associated with failure of some system.2.4.3. Hazard Rate FunctionHazard rate function can be obtained by an equation which assumes a constant hazard rate.2.4.5. Bathtub CurveFigure (2) illustrates the bathtub curve which demonstrates the product failure rate against time.Any product cycle life can be divided into three separate durationsThe first duration (early life) This duration where the failure probability is diminish to minimum. . It what happens in the early life of most new products, sometimes the first period is mentioned as the death rate period.The second duration (normal life or useful life) This is represent ed in the graph by a flat line. Failures and breakdowns happen randomly within this duration. In this period the failure rate tends to become in some way constant. During this period the lowest failure rate is observed, so it is the most appropriate time to make reliability predictions.The third duration ( fag out out) this begins where the slope starts to rise till the end. This typically happen to products when they get old, thus the failure rate increases. Wear out is usually caused by break down due to various reasons such as physical wear and stress.(speaks, 2005)Figure (2) a bathtub curve.A Brief Introduction to Reliability. 2011. A Brief Introduction to Reliability. ONLINE Available at http//www.weibull.com/LifeDataWeb/a_brief_introduction_to_reliability.htm. Accessed 19 March 2011.2.5. statistical Models for Life DataStatistical models for life data such as weibull distribution, survival analysis and guaranty help in producing high accuracy in prediction.The automobile man ufacturing having relied heavily on guaranty interval in its indorsement provide inclines more in reliability and therefore seek such analysis. (Ward and Christer, 2005)2.5.1. Weibull DistributionThe weibull distribution is named after a Swedish professor Waloddi Weibull. He explained the ability to use the weibull distribution in small sizes measurements and it is easiness to supply an accurate model for a broad data sets.At the beginning of his exploring weibull distribution he face up some obstacles and doubts form his colleagues. However, the weibull distribution has ended now to be widely practised in reliability.(8Dodson, 2006)A reason for the wide spread of the weibull distribution is that it has a large different shapes, which makes it easy to fit any data. Also, it is perfect to show the weakest connection of a product. For example, if a system has more than one part, the weibull distribution will present each failure time of each part at the same distribution no matter how insignificant they are .(Nelson, 2003)Figure (3) is a sample of weibull a distribution plot.Figure (3) a sample of weibull distribution plot.Guidelines for Burn-in Justification and Burn-in Time Determination. 2011. Guidelines for Burn-in Justification and Burn-in Time Determination. ONLINE Available at http//www.reliasoft.com/newsletter/v7i2/burn_in.htm. Accessed 19 March 2011.2.5.2. Kaplan Meier Survival EstimatorThe Kaplan Meier estimator is named after Edward L. Kaplan and Paul Meier. It estimates the survival function. In engineering this method is used to measure the time until failure of different products, machine and components.Kaplan EL, Meier P. J Am Stat Assoc 1958 53457-81. Cited by McKenzie S, et al. JOP. J Pancreas (Online) 2010 Jul 5 11(4)341-347. (Reference 14). 2011. Kaplan EL, Meier P. J Am Stat Assoc 1958 53457-81. Cited by McKenzie S, et al. JOP. J Pancreas (Online) 2010 Jul 5 11(4)341-347. (Reference 14). ONLINE Available at http//www.joplink.net/prev/2010 07/ref/02-014.html. Accessed 19 March 2011.2.5.2.1. FormulationWheret (1) 2.5.3. Exponential DistributionThis is the most commonly used distribution in reliability, and is often used to predict the probability of survival to time (t) figure (4) shows a sample of exponential distribution graph.(9Dovich, 1990)Figure (4) a standard exponential distribution graph consecutive Random Variables The Exponential Distribution. 2011. Continuous Random Variables The Exponential Distribution. ONLINE Available at http//cnx.org/content/m16816/latest/. Accessed 19 March 2011.2.5.3.1. FormulationThe probability density function isWhereMean time to failure =Or, where2.5.4. Dis usefulnesss and Advantages of Statistical method actingCost studying and analyzing a quantity of data of different products within a system are an expensive job.The results revealed are not sufficient enough to build an understanding of the type of maintenance needed in this particular situation.The only disadvantage of the obs ervation method appear is when applying it carelessly and without keeping record of foundings, this will result in mixing up different judgements.(4Chalifoux and Baird, 1999)2.6. Introduction to WarrantyWarranty is a provision for a seller to provide assurance to a buyer that the product will perform as implied. (Zhou and Tang, 2008)Warranty brings confidence to the buyer self-propelled vehicles like any other automated system consider warranty to a buyer. (Wu and Li, 2007)Unlike the quality loss function which assumes a fixed propose and accounts for immediate issues, warranty loss occurs during the customer use. (Zhou and Tang, 2008)In automotive industry, data is tracked and analyzed on a regular basis (Zhou and Tang, 2008). The interval can be evaluated on the basis of their costs.The effect of warranty especially in the scene of the interval, affects the performance of the company especially if the number of returns on warranty is high. (Wu and Li, 2007)Neglecting the fact t hat warranty cost is a result of conflict between the customer expectation and the performance of the product, the interval of the warranty liability disturbs the economic sense of warranty. (Wu and Li, 2007)Warranty costs have in many companies been positioned as operational costs. (Ward and Christer, 2005)The regard of warranty in the whole business performance has challenged vehicle manufacturers to develop vehicles that are less costly to repair (Metric Warranty $s) and are more reliable within a longer period of time. (Metric annual failure rates, AFR)For this purpose to be done, warranty cost models that make the impact of reliability on cost and costs associated with repair of specific failure modes should be economically healthy. (Wu and Li, 2007)2.6.1. Warranty ProbabilityThe ratio as Pw is termed as the warranty probability (Ward and Christer, 2005). The warranty probability is the ratio of the number of complaints N against the total number of products Tp.Pw other factor that is important in warranty cost analysis is the complaint factor. (Ward and Christer, 2005)The complaint factor is the ratio of the actual number of complaints and the potential number of complaints where the actual number of complaints is the number of actual complaints fixed. (Ward and Christer, 2005)The method for calculative the warranty probability depends on product performance and customer expectations. (Wang et al., 2010)The distance of performance is a function of the warranty interval. (Ward and Christer, 2005)It is supposed that as time passes, the distance of performance increases, this is the common feature referred to as milage.In motor vehicles the time age of the car has been consistently assumed to be a factor representing its use. (Manna et al. 2008) disdain the fact that mileage can be determined, the correlation between mileage and age of the car is noticeable and positive. (Manna et al. 2008)Since vehicles manufacturing designs and model change with time, the automobile industry prefer attaching warranty to age of the vehicle rather than fine-tune mileage.Warranty is a key factor in bringing confidence to a buyer. The higher the warranty time, the more the confidence is the buyer. (Manna et al. 2008)2.6.2. Warranty Distribution AnalysisFeedback from warranty returns provides a solid basis in determining use failure distribution. (Murthy, and Blischke, 2006)The time interval as a factor contributes significantly to predictions. The warranty intervals are the most solid factor that can be used in assessing the failures prediction.By maintaining warranty and assessing failures for a longer period of time, more knowledge on the performance especially for automated systems is achieved. (Murthy, and Blischke, 2006)Reasons for carrying out warranty data analysis are the chaseForecasting warranty claims.To determine risk assessment and monitoring.Reliability assessment.(12002)2.6.3. Reduction strategies for cost driversThere are two facto rs that have been identified as primary coil warranty cost drivers. The number of occurrence of an event which can be noticed by the analysing failure rate and the cost of the process are the identified cost drivers. (Attardi et al., 2005)The strategies employable for reduction of costs are by reducing the factors. (Attardi et al., 2005)2.6.4. Cost model in product developmentThe cost model has been used in product development in making economic sense of organizational existence. (Karim and Suzuki, 2005)Through its impact in influence of decision making by providing design alternatives that come handy in warranty cost, the model establishment should be in advisory of the product development through calculation of estimates of product total warranty cost. (Aldridge, and Dustin, 2006)Difference in warranty costs based on design alternatives provides a short projection of the optimized design that maintains both customer confidence through warranty and economic advantage to the organiz ation. (Attardi et al., 2005)Identification of necessary product features, capabilities and diagnostic tools that are required in automobile projected warranty savings for the warranty intervals is achievable through the cost model in product development. (Aldridge, and Dustin, 2006)Under the foundation of the cost model, the risk involved in the warranty interval can be evaluated by analyzing the risk involved in an extension of warranty in automobiles. (Aldridge, and Dustin, 2006)It should be taken into consideration that the cost model economic impact is dependent on the period of warranty especially with automobiles that are known to wear and tear. (Karim and Suzuki, 2005)Chapter 3 case study (from notes given by doctor)IntroductionField data in the automotive industry often comes in two types, the first is grouped data expressed by months in service. The second is ungrouped data available from company owned but customer operated fleets and expressed as miles to failure.In many scenarios, data which comes from late stages have a greater importance over the former because of the following reasonsMileage is more objective measure of the component life than time in service.There are types of failures are not tracked by the warranty system.The complexity of censoring mechanism in relating to reliability analysis of grouped warranty data.Therefore, this theoretical case study will focus on the analysing of ungrouped mileage data which is not represented by time in service, because it comes from the company owned fleets.Aim and objectiveTo discuss a procedure to estimate the censoring mileage and the reliability function for a component of interest (e.g. electric battery).DataTable 1 shows a format of failure data from a customer operated fleet. The vehicle mileage is reported only at failure or service events.VINfailed / serviced comopnentfailure / service mileageX009battery45000X018fuel pump91680X021brake pads78470X006front wipers77350X028head lamp4007X015clut ch disks150400X031front wipers51420X003ign.switch3961X013battery16890X007front struts27160X026battery72280X031battery131900X027door lock7298X017fuel pump4734X