A diagnostics design decision model for products under warranty

Warranty obligations in product service involve additional costs to the manufacturers. Building diagnostic features into a product can reduce the warranty costs because of fewer visits needed by warranty service representatives (through self-guided user repairs for simple problems) and a shorter service time (diagnosing time cut short) for each failure. However, this approach increases the product cost and is worthwhile only if the reduction in the expected warranty cost is more than the additional increased costs of the diagnostics system. Models are developed to evaluate diagnostics design decisions for products with warranty service from the manufacturers' point of view. The roles and influence of the key parameters and decision variables based on the consideration of uncertainty are explored. Numerical examples are given to illustrate the proposed models.