Strategic warranty management: a life-cycle approach

The role of warranty has become increasingly important, both as a promotional (particularly where competing products are nearly indistinguishable) and as a protectional device (for complex and expensive products where customers need some assurance). Offering warranty implies additional cost to the manufacturer over the period from product launch to obsolescence. This cost is influenced by technical decisions made prior to the launch. This paper develops a strategic approach to warranty management where warranty-related decisions are made in a framework encompassing the product life cycle and from a business perspective which links technical and commercial issues.