Reliability-Informed Life-Cycle Warranty Cost Analysis: A Case Study on a Transmission in Agricultural Equipment

Abstract In agricultural and industrial equipment, both new and remanufactured systems are often available for warranty coverage. In such cases, it may be challenging for equipment manufacturers to properly trade-off between the system reliability and the cost associated with a replacement option (e.g., replace with a new or remanufactured system). To address this problem, we present a reliability-informed life-cycle warranty cost (LCWC) analysis framework that enables equipment manufacturers to evaluate different warranty policies. These warranty policies differ in whether a new or remanufactured system is used for replacement in the case of product failure. The novelty of this LCWC analysis framework lies in its ability to incorporate real-world field reliability data into warranty policy assessment using probabilistic warranty cost models that consider multiple life cycles. First, the reliability functions for the new and remanufactured systems are built as the time-to-failure distributions that provide the best-fit to the field reliability data. Then, these reliability functions and their corresponding warranty policies are used to build the LCWC models according to the specific warranty terms. Finally, Monte Carlo simulation is used to propagate the time-to-failure uncertainty of each system, modeled by its reliability function, through each LCWC model to produce a probability distribution of the LCWC. The effectiveness of the proposed reliability-informed LCWC analysis framework is demonstrated with a real-world case study on a transmission used in some agricultural equipment.