Cost of warranty for new product 1

[pawelmaz]

Dear all,
I need estimate cost of warranty for new product (mechanical device). Is there any economical formula to do that? Of course from technical point of view we must know everything about product but how it is loking from economic point of view?
Best regards for everyone

 

[PSE]

First, I would look at similar products that you have a warranty history on as well as take a good look at the new product to determine what is likely to fail (basically a product FMEA). From there, I have been able to use the following with reasonable success.

W.C. = %Failure * A.R.C * M.F.

Where:

W.C. is your warranty cost
%Failure is your field failure rate vs sales or shipments
A.R.C is your average repair cost
M.F. is a product "maturity" factor which allows you to mimic a typical product launch cycle. Typically costs will be higher during initial runs (infant mortality) and then decrease as the product design and manufacture matures. How often you change this factor depends on your product life cycle. I typically start out using 1.25 and eventually reduce it to .8 for a "stable" product. Costs can also begin to increase again near the end of product life due to loss of component availability or lower product volume.

Regards,

 

[pawelmaz]

Thank you very much for PSE!!!
This product is gas boilers up to 50 kW. The warranty is for a few year (let say 5). I tried find something in economic literature for engineers but I could find anything.
Best regards