<?xml version="1.0" encoding="UTF-8"?> <article key="pdf/3141" mdate="2013-05-23 00:00:00"> <author>Dragan D. Stamenkovic and Vladimir M. Popovic</author> <title>Cost Based Warranty Optimisation Using Genetic Algorithm</title> <pages>927 - 930</pages> <year>2013</year> <volume>7</volume> <number>5</number> <journal>International Journal of Industrial and Manufacturing Engineering</journal> <ee>https://publications.waset.org/pdf/3141</ee> <url>https://publications.waset.org/vol/77</url> <publisher>World Academy of Science, Engineering and Technology</publisher> <abstract>Warranty is a powerful marketing tool for the manufacturer and a good protection for both the manufacturer and the customer. However, warranty always involves additional costs to the manufacturer, which depend on product reliability characteristics and warranty parameters. This paper presents an approach to optimisation of warranty parameters for known product failure distribution to reduce the warranty costs to the manufacturer while retaining the promotional function of the warranty. Combination free replacement and prorata warranty policy is chosen as a model and the length of free replacement period and prorata policy period are varied, as well as the coefficients that define the prorata cost function. Multiparametric warranty optimisation is done by using genetic algorithm. Obtained results are guideline for the manufacturer to choose the warranty policy that minimises the costs and maximises the profit.</abstract> <index>Open Science Index 77, 2013</index> </article>