Analyze Company Warranty For Free

A warranty analysis is the analysis of time-to-event/failure data. In our example, the individual part is followed from the car sold time to its failure. As in typical model building, we split the data into train and test datasets.

While 1.5% is the average percentage of product sales revenue spent on warranty claims since 2003, there's quite a bit of volatility around that simple metric, depending on the type of product under warranty and the year in which the expense is measured.

Warranty claims are used to reimburse the various service contracts between the manufacturer, the importer, the dealer and the end customer. Warranty claims are also used to collect reimbursement fees from the manufacturer for warranty repairs and service repairs caused by manufacturing faults.

A warranty analysis uses information about past warranty claims to predict the number and cost of warranty claims in the future. By fitting a distribution to your warranty data, you can estimate the number of expected failures in the next month, the next year, or other period of time.

Warranty data are comprised of claims data and supplementary data. Warranty claims data are the data collected during the servicing of items under warranty and supplementary data are additional data (such production and marketing related, items with no claims, etc.) that are needed for effective warranty management.

Warranty data analysis relies on the estimation of a failure distribution based on data including the age and number of returns and the age and number of surviving units in the field.

A warranty analysis uses information about past warranty claims to predict the number and cost of warranty claims in the future. By fitting a distribution to your warranty data, you can estimate the number of expected failures in the next month, the next year, or other period of time.

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Divide the amount of your actual warranty claims in the most recent year by your total sales in the same year to calculate your warranty claims as a percentage of sales. For example, if you had $1,600 in warranty claims and $80,000 in sales, divide $1,600 by $80,000.

Warranty data analysis relies on the estimation of a failure distribution based on data including the age and number of returns and the age and number of surviving units in the field.